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U. S. DEPARTMENT OF AGRICULTURE 

FOREST SERVICE 

WILLIAM B. GREELEY, Forester 



TIMBER DEPLETION, LUMBER PRICES, LUMBER 

EXPORTS, AND CONCENTRATION OF 

TIMBER OWNERSHIP 



REPORT ON SENATE RESOLUTION 311 

(SECOND EDITION) 



By 



The Forest Service 
U. S. Department of Agriculture 



JUNE 1, 1920 




WASHINGTON 

GOVERNMENT PRINTING OFFICE 

1920 



U. S. DEPARTMENT OF AGRICULTURE 

t FOREST SERVICE 

WILLIAM B. GREELEY, Forester 



TIMBER DEPLETION, LUMBER PRICES, LUMBER 

EXPORTS, AND CONCENTRATION OF 

TIMBER OWNERSHIP 



REPORT ON SENATE RESOLUTION 311 

(SECOND EDITION) 



By 



The Forest Service 
U. S. Department of Agriculture 



JUNE 1, 1920 




WASHINGTON 

GOVERNMENT PRINTING OFFICE 

1020 






TABLE OF CONTENTS. 



Page. 

Letters of transmittal o 

Effects of scarcity and liigh prices of forest products upon rep- 
resentative industries " 

General building and construction 7 

Farming 8 

The railroads 8 

The furniture industry 

Thf veneer industry 'J 

The handle industry 10 

Tlie v.hiplc and asricultural implement industries 10 

Tl-;,. „..,vvp-i,Pr^- 11 

■Til- li iii'.ii -HinmariEed 11 

AbnoriiKii ;: .:, m relation to present scarcity and high 

prii-is 12 

Steady piM^n ., ,,i i, irst depletion 13 

Fon.si ,i [jk iioii aiul migration of the lumber industry 13 

Basis for data 1-1 

New England 1-1 

The growth and decline of the lumber industry 14 

Original and remaining forests 16 

Area 15 

Stand 15 

The annual drain upon the forest 16 

The annual growth 16 

Growth compared with cut . 16 

The life of the industry 16 

Present and future consumption of lumber in New 

England 16 

New York 10 

Pennsylvania 17 

The Lake States 17 

Growth and decline of the lumber industry 17 

White pine 17 

Hemlock : 17 

The northern hardwoods 17 

Original and remaining stand and rate of cut 17 

Lcwer Peninsula of Michigan 18 

Wisconsin and Upper Peninsula of Michigan 18 

Minnesota 18 

Condition of the remaining supplies IS 

The annual drain upon the forest 18 

Lumber cut compared with total cut ' 18 

Deterioration of the forest 10 

The anrual growth 19 

Growth compared with cut 19 

The life of the industry 19 

Present and future consumption of lumber in the Lake 

States 19 

The southern yellow-pine region 19 

The growth and decline of the yellow-pine industry,.. 19 

The original and the present pine forests of the South_. 19 

Total merchantable stand 20 

Annual drain upon the forests 20 

The annual growth 20 

Cut and growth contrasted 20 

Deterioration of the forest 20 

Change to inferior species 21 

The lesson of the South Atlantic States 21 

Life of the yellow-pine industry 21 

Reduction of the output 21 

Present and future consumption of lumber in the South. 21 

Cypress regions 22 

The Rocky Mountain region 22 

Development of the lumber industry 22 

Original and present stand 22 

The annual drain upon the forests 22 

Annual growth . 22 

Cut compared with growth 22 

Local needs , 23 

The future of the lumber industry 23 

Pacific coast 23 

Growth of the lumber industry 23 

Original and remaining forests 23 

Growth and depletion 24 

Life of the industry 24 

The Southern Appalachian hardwoods 25 

Growth and decline of lumbering 25 

The original forest 25 

The remaining stand 25 

Lumber cut and total cut 25 

Deterioration of the forest 25 

The duration of the cut of old growth 25 

Effect of depletion upon selected industries 26 

The annual growth 26 

(Jrowth compared with cut 26 

Importance of the Southern Appalachians in the future 

lumber supply of the country 26 

Hardwoods of the lower Mississippi Valley 26 

Area and stand 26 

Development of the lumber industry 26 

Growth and depletion 1 27 

The future of the region 27 



Steady progress of forest depletion — Continued. 

Newsprint supplies 

The facts as to depletion 

Alaskan supplies of pulp wood 

The moveniont of prices 

Naval «t"ri>« ^ii-'pii.-^ 

Original .iijil'ij.,,. Ill i.,i.M.-, ./iThe'lfnited'StatesIII^IIIIII 

Original forest area 

Present forest area 

Snw-timber stands 

Total stand 

Location of requirements with reference to production and 

supplies 

Future trends in requirements 

Depletion and growth 

Present dopletion and growth 

Possible growth 

Forest depletion and lumber prices 

Price changes and regional depletion , 

Eastern softwood markets 

Middle western markets 

Eastern hardwood markets 

Plentiful and depleted species 

Prices in depleted or nonforested versus forested re- 
Prices and costs of production and distribution 

Mill prices and production costs 

Inland Empire 

Southern pine States 

Wholesale costs and profits 

Transportation 

Retail pries and costs 

The upward movement of prices 

Retail profits 

Lumber prices unjustified by production and distribu- 
tion costs 

Price control 

Some specific effects of regional depletion on prices 

Summary of principal price conclusions 

Lumber exports and timber depletion 

Lumber exports before and during the war 

Probable developments in lumber exports 

Effects of exports upon domestic timber supplies 

Imports of forest products 

Export trade policy 

Concentration in timber ownership, manufacture, and marketing. 

Concentration of timber ownership in 1910 

Timber ownership in the Northeast 

Ownership of .softwood timber in the Southern States 

Ownership of hardwood timber 

Timber ownership in the Lake States 

Timber ownership in Idaho 

Timber ownership in Washington and Oregon 

Timber ownership in California 

Changes in timber ownership from 1913 to 1918 

A summary of the present situation as to timber owner- 
ship 

Concentration tendencies in lumber manufacture and mar- 
keting 

The creation of large operating groups of affiliated 

sawmills 

Greater financial strength of the lumber industry 

Concentration of lumber marketing 

Development of trade associations 

Effects of timber depletion upon concentration 

Forest depletion the fundamental problem 

Cumulative effects of timber depletion 

Timber depletion and lumber prices 

Idle forest land 

A national forestry policy 

The Federal legislation needed 

Cooperation with States In fire protection and forest 

renewal 

The extension and consolidation of Federal forest hold- 
ings 

The reforestation of ilniuded Federal lands 

A study of fi ■• I i,i\:ilh II and insurance 

The survey : ' ' ■ in of forest resources 

Current np, i r : i forest research 

. The State iegislii ;i :, . ; ! 

Fire prevonlin .ml i . ii. 'station of private lands 

State and munirip.il for.'sts 

Taxation of forest lands 



r, or u, 

NOV 19 )y2(J 



LETTERS OF TRANSMITTAL. 

June 1, 1920. 

The President op the United States Senate. 

Sir: I have the honor to submit herewith a report on forest depletion in the TJnited Stat«s, prepared by the Forest Service in this 
department pursuant to Senate resolution 311. 

This resolution requests information on: 

1. The depletion of timber in the United States. 

2. The effects of timber depletion upon the high cost of materials. 

3. The effects of lumber exports upon domestic industries. 

4. The effects of depletion upon the concentration of timber ownership and manufacture and the relation of such concentration to 
the public welfare. 

The outstanding facts reported by the Forest Ser\'ice are: 

(1) That three-fifths of the original timber of the United States is gone and that we are using timber four times as fast as we are growing 
it. The forests remaining are so localized as greatly to reduce their national utility. The bulk of the population and manufacturing indus- 
tries of the United States are dependent upon distant supplies of timber as the result of the depletion of the principal forest areas east 
of the Great Plains. 

(2) That the depletion of timber is not the sole cause of the recent high prices of forest products, but is an important contributing cause 
whose effects will increase steadily as depletion continues. 

(3) That the fundamental problem is to increase the production of timber by stopping forest devastation. 

The \irgin forests of the United States covered 822 million acres. They are now shrunk to one-sixth of that area. All classes of forest 
land, including culled, burned, and cut-over areas, now aggregate 463 million acres, or a little more than one-half of our original forests. 
Of the forest land remaining and not utilized for farming or any other purpose, approximately 81 million acres have been so severely cut 
and burned as to become an unproductive waste. This area is equivalent to the combined forests of Germany, Denmark, Holland, Bel- 
gium, France, Switzerland, Spain, and Portugal. Upon an enormous additional area the growth of timber is so small in amount or of such 
inferior character that its economic value is negligible. 

The merchantable new timber remaining in the United States is estimated roughly at 2,215 billion board feet, something less than 
three-fourths of which is wgin stumpage. The rest is second growth of relatively inferior quality. About one-half of the timber left 
is in the three Pacific Coast States, and over 61 per cent ia west of the Great Plains. A little over one-fifth of the timber left in the country, 
or 4G0 billion board feet, is hardwoods. 

There is now consumed or destroyed annually in the United States 56 billion board feet of material of .saw timber size. The total 
yearly consumption of all classes of timber is about 26 billion cubic feet. Our depleted forests are growing less than one-fourth of this 
amount. The United States is not only cutting hea\'ily into its remaining ^-irgin forests everj' year, but is also using up the smaller ma- 
terial upon which our future supply of saw timber depends much more rapidly than it is being replaced. 

The two striking effects of timber depletion already apparent are: 

(1) The injury to large groups of wood users and to many communities resulting from the exhaustion of the nearby forest regions from 
which they were formerly supplied ; and 

(2) The shortage of timber products of high quality. 

Less than 5 per cent of the virgin forests of New England remain, and the total stand of saw timber in these States is not more than 
one-eighth of the original stand. New York, once the leading State in lumber production, now manufactures only 30 board feet per capita 
yearly, although the requirements of its own population are close to 300 board feet per capita. The present cut of lumber in Pennsylvania 
is less than the amount consumed in the Pittsburgh district alone. The original pine forests of the Lake States, estimated at 350 billion 
feet, are now reduced to less than 8 billion feet, and their yearly cut of timber is less than one-eighth of what it used to be. These four 
densely populated regions, containing themselves very large areas of forest land, are now largely dependent upon timber grown and manu- 
factured elsewhere and are becoming increasingly dependent upon timber which must be shipped the width of the continent. 

The bulk of the building lumber and structural timbers used in the Eastern and Central States during the last 15 years was grown 
in the pine forests of the South. The virgin pine forests of the South Atlantic and Gulf States have been reduced from about 650 billion 
board feet to about 139 billion feet. The production of yellow-pine lumber is now falling off and within ten years will probably not exceed 
the requirements of the Southern States themselves. 

The United States at one time contained the most extensive temperate zone hardwood forests in the world. One region after another 
has been cut out. The production of hardwood products on the past scale can not be long continued. The scarcity of high-grade oak, 
poplar, ash, hickory, walnut, and other standard woods is now placing many American industries in a critical condition. 

The depletion of forest resources is not confined to saw timber. Since 1909, the country has ceased being self-supporting in newsprint 
paper and now imports two-thirds of the pulp, pulp wood, or newsprint which we require. This condition is due in part to timber deple- 
tion, in part to failure of the paper industry to expand in our western forest regions as the lumber industry has expanded. In 1919 the 
production of turpentine and rosin had fallen off 50 per cent. Within ten years the United States will lose its commanding position in the 
world's market for these products and may in time be unable to supply its domestic requirements. 

The termination of the war found the lumber- industry with depleted stocks. Production during the war had been much less than 
normal on account of shortages of labor and equipment and embargoes on transportation. A large part of the lumber produced had been 
taken by the Government for war purposes. During the same time, the normal construction of dwellings and industrial structures and 
the use of lumber in many manufactviring industries had been greatly curtailed. Following the war, these pent-up demands were released. 
They caught the lumber industry not only with its stocks short and broken from war conditions but unable, on account of labor difficulties, 

3 



4 TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 

lack of freight cars, and bad weather in important producing regions, to respond rapidly with increased production. Aside from the general 
causes affecting prices of most commodities, the expansion of credit accompanied by currency inflation and the wave of speculation and 
extravagance, an "auction" lumber market would no doubt have resulted from the frenzied competition of buyers to obtain the limited 
stocks available, wholly inadequate to satisfy current demands. 

Underthecombinedinrtuenceof the general conditions making for high prices and this situation in the lumber industry itself , prices 
rose to unprecedented limits. In March, 1920, average mill prices in the South and West had increased 300 per cent and more over the- 
prices received in 1914, and average retail prices in the Middle West showed increases ranging from 150 to 200 per cent. In the case of 
high (juality hardwoods and other specialized products, the average advance in eastern wholesale markets was from 200 to 250 per cent, 
and the demand at this advance was still unsatisfied. 

The timber market has been more unstable than ever before in our history. Many industries have been unable to secure their supplies 
of timber at any price. The output of certain entire industries has been reduced as much as 50 per cent. Middlemen and manufacturers 
of wooden commodities have been able to pass on to the consumer and even augment any price they might pay. Necessities have fared 
worse than luxuries. The ramifications of lumber shortages and high prices are limitless and have affected seriously practically our entire 
population. 

Obviously these lumber prices bear no relation to the cost of production and distribution. While the costs of production in the lumber 
industry have at least doubled as compared with 1916, lumber prices have much more than doubled and have become wholly disproportionate 
to operating costs. Excessive profits have been made by the industry. The division of these profits between manufacture and distri- 
bution has varied in accordance with circumstances and the ability of the various elements in the industry to dominate the situation. 
That prices have been too high is recognized by the best thought in the industry, and some manufacturers have sought to stabilize the 
market. 

The depletion of timber in the United States has not been the only cause of these excessive prices on forest products, but has been 
an important contributing cause. It has led to the migration of both the softwood and hardwood lumber industries from region to region 
and each is now cutting heavily into its last reserves. The exhaustion of timber in near-by forest regions has compelled many large lumber 
consuming centers to import their supplies from greater and greater distances. The wholesale priqes on upper grades of softwood lumber 
in New York were from $20 to $25 per thousand prior to 1865 when mills in the san^ State supplied this market, from $35 to $45 between 
1865 and 1917 when most of the supply came from the Lake States and the South, aud are now entering a general level of $130 a thousand 
feet with a large part of the material coming from the Pacific coast. In the Middle West, the building grades of white pine lumber cut 
in Michigan, Wisconsin, and Minnesota, retailed at $15 to $20 per thousand feet prior to 1900. As lumber from the Lake States became 
exhausted and southern pine took over this market, the retail prices rose to a level of $25 to $35 per thousand feet. The replacement of 
southern pine by West Coast timbers now in progress is initiating a new price level of about $80 to $85 per thousand feet. The increased 
cost of transportation is but one factor in these new price levels, but it is an important one. The freight bill on the average thousand feet 
of lumber used in the United States is steadily increasing as the sawmills get farther and farther away from the bulk of the lumber users. 
Much information is available to show the disadvantages of the lumber consumer in regions whose near-by forests have been exhausted 
Retail prices in the Ohio Valley, for example, on certain grades exceed retail prices on the identical grades in Oregon in some instances 
by as much as $50 per thousand board feet after allowing for all transportation costs. The curtailment of lumber output in the eastern 
regions not only has compelled the average consumer to pay more for freight but has enhanced the effects of congestion in transportation 
and of climatic and other factors limiting the production in regions which still support a large lumber industry. It has restricted oppor- 
tunity for competition and thereby increased the opportunity of the lumber manufacturer or dealer to auction his stocks for higher prices. 
In other words, the effects of forest depletion can not be measured in terms of the total quantity of timber remaining. Its injury is felt 
particularly through the steady process of regional exhaustion. Our remaining timber is so localized that its availability to the average 
user of wood is greatly reduced. Particularly does such a restricted location of the timber supplies assume a serious national aspect in the 
face of transportation congestion and inadequate transportation facilities such as the United States is now experiencing. Had the forests 
and forest industries of the Eastern States still existed, the opportunities for regional competition in supplying the lumber markets and 
the wider distribution of lumber transport undoubtedly would have afforded a curb upon rising prices which did not exist in 1919. 

The export trade in lumber does not have a serious bearing upon timber depletion from the standpoint of quantity, but does have 
an important bearing upon the duration of our limited supply of high-grade timber, particularly of hardwoods. The exports of high-grade 
oak, walnut, hickory, ash, and other woods essential to many industries in the United States which now seem probable will further 
enhance the shortage of such products for the domestic market and the tendencies already evident toward sustained high prices. On the 
other hand, the United States imports from Canada about two-thirds of its total consumption of newsprint or newsprint materials. The 
effects of our export trade in lumber should be considered from the standpoint of the specific timber grades or products whose depletion 
is most imminent and threatening to American industries. 

The concentration of timber ownership has not changed materially since the exhaustive report made upon this subject by the Bureau 
of Corporations in 1910. One-half of the privately owned timber in the United States is held by approximately 250 large owners, the 
ownership of the remaining timber being very widely distributed. The tendency toward the acquisition and speculative holding of timber 
beyond operating requirements has been checked, and the present tendency is toward the manufactui-e of large timber holdings. At 
the same time the lumber industry, particularly in the Western States, is going through a partial reorganization into larger operating and 
marketing groups. In this there is a tendency for small mills to disappear and small timber holdings to be blocked into larger ones 
adapted to extensive lumber manufacture. ^Miile there is still a large number of individual timber owners and of sawmills operating 
as separate units, tlie larger interests are acquiring a more dominant place in lumber manufacture in the West. It is to be expected 
that these large interests or groups will maintain, as time goes on, a fairly constant supply of timber for their manufacturing plants by 
acquiring smaller holdings. No information is at hand which would justify a conclusion that monopolistic conditions on any general 
scale have grown out of this situation. There are many instances to the contrary. On the other hand, the degree of control of the timber 
remaining in the United States exercised by a comparatively small number of large interests will steadily increase as timber depletion 
continues, approaching a natural monopoly in character, and this control will extend particularly to the diminishing supply of high- 
grade material. 

In 1918 our per capita consumption of lumber was about 300 board feet. The homes and industries of the United States require at 
least 35 billion feet of lumber yearly, aside from enormous quantities of paper and other products of the forest. A reduction in the cm-rent 
supply of lumber below this figure would seriously curtail our economic development. Appreciable increases in lumber imports are not 
possible except at excessive prices. We can not afford to cut our per capita use of lumber to one-half or one-third the present amount — 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 5 

to the level of European countries where lumber is an imported luxury. We must produce the great bulk of the timber which we need 
ourselves and we have the resources for doing so. 

The solution of the problem presented by forest depletion in the United States is a national policy of reforestation. Increased 
and widely distributed production of wood is the most effective attack upon excessive prices and monopolistic tendencies. Depletion 
has not resulted from the use of forests but from their devastation, from our failure, while drawing upon our reservoirs of virgin timber, 
to also use our timber-growing land. If our enormous areas of forest growing land, now idle or largely idle, which are not required for any 
other economic use, can be restored to timber growth, a future supply of forest products adequate in the main to the needs of the country 
will be assured. 

I therefore most earnestly request your consideration of the practical measures proposed in the accompanjing report for putting a stop 
to forest devastation and restoring our idle land to timber production. I would emphasize especially the immediate urgency of legislation 
(1) which will permit effective cooperation between the Federal Government and the several States in preventing forest fires and growing 
timber on cut-over lands, and (2) which will greatly extend the National Forests. Enlargement of the National Forests offers immediate 
relief. On these publicly administered areas high quality timber can be grown and utilized to the maximum advantage; regrowth will 
follow cutting; and, under the regulations of the Forest Service, the disposal of timber will foster competitive conditions in the lumber 
industry. These steps are the foundation of an effective national policy for insuring a permanent and adequate supply of timber. 

Concurrently with these measures, a comprehensive survey of the forest resources of the United States should be made. 
Respectfully yours, 

E. T. Meredith, Secretary. 



June I, 1920. 
The honorable the Secretary of Agriculture. 

Sir: I transmit herewith a report on forest depletion and related questions which has been prepared by the Forest Ser\ice in response 
to Senate resolution 311. The existing quantities and current growth of a resource so great in extent and so widely distributed as wood 
can not be stated in exact terms. To obtain strictly accurate and final data on these subjects would require an exhaustive field study 
covering at least two years. In order, however, to present the situation as clearly and concretely as possible, I have felt it desirable to use 
the best quantitative data available, recognizing that much of it is l)ut tentative or approximate in character. 

A large number of men in the Forest Serv-ice have participated in assembling and compilation ; but the report is principally the work 
of Assistant Forester Earle H. Clapp, in charge of the Branch of Research. 

Respectfully, W. B. Greelet, Foresttr. 



PREFATORY NOTE TO SECOND EDITION. 

For greater clearness, in reprinting this report figures 10 and 14 have been enlarged, and in consequence the paging from page 36 
to the end has been altered. No change has been made in the text of the report, except for the correction of one sentence on page 43 of 
the second edition. 



TIMBER DEPLETION, LUMBER PRICES, LUMBER EXPORTS, AND CONCENTRA- 
TION OF TIMBER OWNERSHIP. 



REPORT ON SENATE RESOLUTION 311. 



The following report is submitted iu compliance with Senate 
resolution 311 (66th Cong., 2cl spss.), introduced by Senator 
Capper and considered and agreed to by the Senate on Febru- 
ary 21, 1920. The resolution provides : 

Whereas it has been reported that the forest resources of the 
United States are being rapidly depleted, and that tlie situa- 
tion is already serious and will soon become critical ; and 
Whereas these alleged facts are either largely unknown to the 
public or are in dispute : Therefore be it 

Resolved. That the Secretary of Agriculture be, and he is 
hereby, directed to report to the Senate on or before June 1, 
1920, on the following matters, using what information the For- 
est Service now has available, or what may be obtained readily 
with its existing organization : . 

1. The facts as to the depletion of timber, pulp wood, and 
other forest resources in the United States. 

2. Whether, and to what extent, this affects the present high 
cost of materials. 

EFFECTS OF SCARCITY AND HIGH PRICES OF FOREST PRODUCTS UPON REPRESENTA- 
TIVE INDUSTRIES. 



3. A\'hether the export of lumber, especially of hardwoods, 
jeopardizes our domestic industries. 

4. Whether this reported depletion tends to increase the con- 
centration of ownership in timberlands and the manufacture of 
lumber, and to what extent; and if such concentration exists, 
liow it affects or may affect the public vv'elfare. 

A comprehensive and fully adequate report on these matters 
would require an exhaustive survey of tlie forest resources of 
the country, their ownership, the industries dependent on them, 
and the general related economic conditions. No such survey 
lias ever been made. Nevertheless, data already available or 
secured throw much light on the subjects of inquiry. 

Depletion and the effect of depletion on prices are so interre- 
lated that sections 1 and 2 of the resolution are considered 
together. 



To illustrate the general .situation, the salient facts regard- 
ing a few representative industries are first presented. They 
are chosen because of the extent of their raw material demands, 
their basic character industrially, and the way in which they 
touch, directly or indirectly, the life of our entire population. 
They are : General • building and construction, farming, the 
railroads, the furniture, veneer, handle, vehicle, and agricul- 
tural Implement industries, and the newspapers. 

A shortage in housing accommodations that is almost world- 
wide has brought home vividly the close relation of building 
to the comfort, health, and general welfare of the public. When 
for any reason construction falls below normal, overcrowding, 
high rents, lowered standards of living, and other evils follow. 
Therefore first place will be given to a discussion of conditions 
in the general building and construction industry. 

GENERAL BUILDING AND CONSTRUCTION. 

More lumber is used in the United States for general building 
and construction than for any other purpose. In normal years 
probably 28 billion board feet is used in this way out of an 
average annual cut of 40 billion. 

For the five years before the war, 1910-14, the average annual 
building bill of the country shown by building permits was 
approximately $670,000,000. After dropping to .$445,549,493 in 
1918, it rose in 1919 to $1,326,936,702; but with building costs 
increased 100 per cent or more, actual construction did not 
much, if any, exceed the prewar average. Apparently all con- 
struction work in the United States is behind requirements, but 
the deficit is greatest in dwelling houses. 

The building permits issued in 21 cities of various sizes widely 
distributed over the country show that, in values, housing con- 
struction formed 36 per cent of all building in 1913, 21 per cent 
in 1918, and 27 per cent in 1919. Housing construction in 1913 
was exceeded in 1918 in only two of the 21 cities, and in 1919 
in only 6, in spite of the " build-a-home " campaign. The falling 
off in house construction generally appears to have been par- 



ticularly marked since the latter part of 1919, when the greatest 
upward movement of lumber prices began. 

The United States Housing Corporation states that normally 
30 per c-ent of the number of buildings constructed are dwellings ; 
that in 1919 dwellings were only 15 per cent; that 1,000,000 
families iu the United States desired houses even before the 
war; that the short;\ge has since increased very rapidly; that 
there were but 70,000 bouses built in 1919, when to have met the 
requirements there should have been 500,000 ; and that in 1S90 
an average of 110* families occupied 100 homes, but to-day 121 
families occupy 100 homes. The construction of houses in 1918 
was less than in 1919. 

A part of the reason for delayed house construction, particu- 
larly in the latter part of 1919 and in 1920, is abnormally high 
lumber prices. The Pittsburgh home builder of 1913 paid $27 
per thousand board feet for his No. 1 common dimension 2 by 4 
framing $72 in 1920. Sheathing lumber. No. 2 common yel- 
low pine, cost him .$26 in 1913 and $S0 in 1920. Yellow-pine 
finishing lumber increased from $42 to $140. If he used plain 
oak finish instead of southern pine, he paid $85 in 1913 and $260 
in 1920. Yellow-pine siding rose from $36 to $120, B and better 
flat-grain flooring from $38 to $142. Plain oak flooring cost in 
1913 $70 per thousand feet and in 1920 $290, and quartered 
oak rose In the same period from $102 to $352. 

The total cost of houses has increased proportionately. A 
frame hou.se built in Washington, D. C, in 1917 for $6,250 is 
now being duplicated from original plans at a cost of $12,2.50. 
A St. Paul architect reports that a house was built for $4,240 
in 1915. not including plumbing, heating, and wiring, and that 
a house built from the same plans in October, 1919, cost $7,724, 
while for identical plans in February, 1920, the cost rose to 
$11,820, or 179 per cent over the 1915 price. The lumber and 
millwork costs in 1920 were $5,039, or $799 more than the total 
cost of the house in 1915. All of the items increased in 1920 
over 1915, but with the exception of an insignificant item for 
a bond the percentage increases for lumber (304 per cent) and 
millwork (222 per cent) were the highest. On a six-room frame 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



house built in Washington, D. C, for $4,771.60 in 1913 bids on 
identical plans in May, 1920, total $11,465.50. 

The lumber lor a ready-cut, one-story, five-room house which 
was listed at $SS3 in 1915 had been i-aised to .$3,272 in April, 
1920, a total increase of 270 per cent. Another company dealing 
in ready-cut houses listed the material for a two-story seven- 
room house at $1,995 in 1915 and now lists it at .$5,600.90, an 
increase of 181 per cent. 

Lumber prices alone do not tell the whole story. The person 
who builds a house faces a series of difficulties in securing his 
materials ; delays, many of which enter materially into increas- 
ing costs; many of the grades desired, particularly the better 
grades, can not be secured easily, sometimes not at all. Very 
often the lumber secured Is not properly dried and compara- 
tively inferior and unsatisfactory construction results. This 
situation, combined with delays in securing materials, labor 
difficulties, etc., makes the construction of a dwelling house a 
highly uncertain and speculative venture, take^ it entirely out 
of the reach of large numbers of people, and leads to a gradual 
lowering of standards of living. Classes of industrial construc- 
tion which can go forward regardless of uncertainties and 
costs are able to pay lumber prices which the ordinary home 
builder can not afford and Increase the element of specula- 
tion in the business of building houses for sale or rental. 

FARMING. 

Farms consume a very large aggregate of construction lum- 
ber. Cheap high-grade building material aided powerfully in 
the rapid development of farm lands. The Middle West, for 
example, was built up largely with the output of white pine 
lumber from the Lake States. In the eighties first quality white 
pine lumber such as can now hardly be found in any market 
in the United States commonly retailed throughout the Middle 
West for $15 to $20 per thousand feet. In February, 1920, the 
farmer in Kan-sas paid $70 per thousand for yellow pine framing 
and about the same for Douglas fir. For No. 2 common lumber 
suitable for temporary sheds and rough construction, either fir 
or southern pine, he paid $72.50. B and better yellow pine 
finishing lumber for house construction cost $147.50. Silo 
stock cost $185. 

To ascertain the effect of present lumber prices and short- 
ages upon the farming industry, questionnaires were sent to a 
large number of agricultural county agents employed coopera- 
tively by the Federal Government and the States in 33 States 
lying east of the Rocky Mountains, and similar questionnaires 
were also sent to a large number of retail lumber dealers sup- 
plying country trade in seven Middle Western States. 

County agents throughout practically this entire territory re- 
port a marked suspension in new construction and even in farm 
improvements and repairs requiring lumber. Out of some 250 
counties in 32 States only about half a dozen agents reported 
more building than in tlie past. New building is reported as 
going on normally or in excess of normal in only 10 out of 
every 100 counties, and this in regions of exceptional pros- 
perity. In the Prairie States, from Illinois north and west, re- 
pairs are reported by lumber dealers as deferred to an extent 
of about 32 per cent, and new construction as somewhat less 
than 50 per cent of normal. The average yearly amounts of 
lumber sold per yard In farming districts of Nebraska and 
Kansas were slightly 2iore in 1919 than in 1917 or 1918, but be- 
low the prewar average of 1910 to 1915. The widespread de- 
ferment of building is almost uniformly laid to a combination 
of high lumber prices and shortages of labor. 

Lumber dealers for several of the Middle Western States 
report lumber stocks on hand as above normal. This is to 
guard against delayed shipments, to be able to supply antici- 
pated increase in demands, etc. Apparently throughout much 
of the region covered supplies could usually be secured in the 



desired amount and quality if prices could be paid. Locally, 
however, the pronounced changes in lumber distribution of the 
Iiast year have apparently made it diflicult to secure desired 
materials and qualities without delay. The difficulties were 
greater with the better grades than with common lumber, and 
they occurred even in the heart of the manufacturing district 
in the South, because of excessive demands and compelition for 
iliis class of material. 

An attempt was made also to get at normal and probable 
future lumber requirements of tlie farming industry. The esti- 
mates of county agents indicate an average annual utilization 
per farm unit of about 2,000 board feet. For practically the 
entire region covered an increased future demand for lumber 
is predicted In order to take care of improvements looking 
toward better equipment and improved living- conditions, provi- 
sion for increasing population, and the development of new 
farm units. This is Important, in the face of falling lumber 
production in all parts of the country except the extreme West. 

Eighty per cent of the county agents report that the ex- 
tremely high prices of lumber are placing a handicap on farm 
development and the production of crops and live stock. The 
;nost serious efEect reported appears to prevail throughout the 
.sparsely timbered regions, where in. cases of emergency the 
farmer is not able to secure supplies from the farm woodland. 
Live-stock raising and dairying seem to be the hardest hit, 
because of the large barn equipment and shelter necessary. It 
is reported that heavy losses of implements and crops are re- 
.sulting from lack of proper storage facilities. In some of the 
newer sections it is even reported that farmers who have not 
yet reached a stable financial basis are leaving the land because 
of the cost of new construction. It is reported from all parts 
of the territory covered that present conditions are tending to 
lower the standards of living and to make it more difficult to 
hold on the farm the farmer's own children and desirable 
classes of labor. 

THE RAILROADS. 

The normal demand tor raih'oad ties is somewhere between 
100 million and 125 million annually. In 1918, however, ijur- 
chases were slightly under 77,500,000 and in 10 months of 1919 
were slightly uver 84,.500,000. During the war and the period of 
Government supervision of the railroads extensions could not 
be made, and improvements were necessarily confined to those 
of an urgent character. Lumber purchases were therefore at 
a minimum. Even under such a policy of retrenchment rail- 
road purchases of sawed materials, excluding hewn railroad 
ties, telephone poles, etc., aggregated approximately 4J billion 
feet, or 14 per cent of the total lumber cut of the country for 
1918. 

That there have been profound changes in the lumber dis- 
tribution from different regions during the past year is shown 
by the invasion of the Middle Western and Eastern States by 
Douglas fir ties. These are regions which in the past have been 
supplied with the standard oak tie cut immediately along the 
rights of way or with southern pine ties from the South. 
During 1919 orders amounting to nearly 100,000,000 board feet 
were placed for Douglas fir ties for eastern roads because of 
the uncertainty of securing adequate supplies along their rights 
of way and because of the excessive costs of local ties. Doug- 
las fir ties are now said to be costing eastern roads from $1.75 
to $2 each at their treating plants or on their rights of way. 
In other words, oak ties cut within a few miles of the right 
of way and bearing practically no charge in freight and south- 
ern pine ties are now being replaced by fir ties hauled overland 
across the continent or shipped through the Panama Canal. 

To supply their general lumber requirements the railroads 
have obvious advantages in the purchase of lumber from mills 
along their lines, and increases in prices have been far less 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



pronounced than for other industries. During the last four 
.vears, however, the cost of lumbec purchased has almost 
doubled, while the amounts have been reduced. Under the 
jireat financial burdens of readjustment and reconstruction 
following the war added costs of any important material delay 
even the most needed repairs and betterments and add to trans- 
portation difficulties, which react upon all industries and con- 
sumers. Uncertainty as to securing adequate supplies of de- 
sired materials at the time wanted has made it necessary for 
railroad companies in general to hold comparatively large sur- 
pluses, a tendency which serves to accentuate shortage for all 
purchasing industries. Railroads operating in the forest re- 
gions ordinarily carried a few years ago but from one to two 
weeks' supplies, since stocks could be replenished quickly. 
Other roads carried stocks sufficient to last several months. 
The timber roads are now carrying from 6 to 10 weeks' sup- 
plies and other roads sufficient to last from 6 to 9 months. 
THE FURNITURE INDUSTRY. 

The fm-niture industry is one of a group of industries which 
utilize mainly high-grade hardwoods and have had much the 
same history. They began in the Northeast, where for many 
years the local supplies were ample for their needs. The 
waning of these supplies forced the industries westward, where 
they rapidly expanded in the last quarter of the nineteenth 
century, drawing mainly on the magnificent virgin hardwood 
forests of the Middle West. Within the last 15 or 20 years 
they have been forced to turn more and more from the depleted 
and vanishing stands of the States along the Ohio to the timber 
northward and southward. Tlieir present sources of supply 
are very largely the remoter and more inaccessible portions 
of the Southern Appalachians and the lower Mississippi Valley. 
When these forests are cut out the industries will have ex- 
hausted practically their last large resources of old-growth 
timber. 

Besides furniture the group includes the veneer, handle, 
vehicle, and agricultural-implement industries. These all com- 
pete among themselves for raw material. 

Before the end of the summer of 1919 the demand for furni- 
ture had assumed such proportions that the normal production 
of the large factories during the current season liad been almost 
wholly contracted for, with many retailers uncared for. The 
immediate result was a corresponding demand for lumber on 
the part of the furniture-manufacturing industry, which nor- 
mally uses about li billion feet, and is the largest consumer of 
high-grade hardwood timber in the United States. Hardwood 
lumber stocks following the war were low and have since gone 
to as low as half the normal ; production has fluctuated down- 
ward to a minimum, in some districts of as low as 50 per cent 
of normal, so that it has been the practically universal ex- 
perience of furniture manufacturers that desired supplies of 
raw material could be secured only with the greatest difficulty, 
particularly during the past six months. 

The veneer situation has been equally bad ; orders for sawn 
oak veneers are said to be 100 per cent greater than stocks, 
and sliced and rotary veneer equally difficult to secure. For 
this and other reasons production of furniture, in the face of 
unprecedented demands, is from 15 to 25 per cent below 
normal, and many factories face shut downs because of in- 
ability to secure raw materials. Individual furniture manu- 
facturers bid against each other for the inadequate supplies 
of lumber and veneer available, while their industry competes 
with the automobile, musical instrument, and other manufac- 
turers similarly situated. The only factories which are not 
having serious trouble in getting wood supplies seem to be the 
small plants which can get local timber and which make com- 
paratively low-grade furniture. 

Difficulties have been aggravated by lack of facilities in both 
the lumber and the furniture industries for artificial drying of 



wood. In prewar practice hardwood lumber was ordinarily 
air seasoned for six to nine months before sale. Furniture 
dealers are now purchasing material practically green from 
the saw, involving heavy additional freight charges. While 
the uncertainty as to securing material and the need for a long 
drying period justify the carrying of larger stocks at the 
factory, it is reported that furniture manufacturers have on 
the average only about one-half of the stocks carried before the 
war. Supplies have been so limited and uncertain that lumber- 
men have refused to take contracts for their output at any 
specified price and have even refused to give buyers an option 
on any stated amount of lumber at market prices on delivery. 
Competition has become so keen that buyers have been ordered 
to secure lumber almost regardless of price. 

Naturally prices have jumped under such competition. While 
there has been an increase during the past four years in prac- 
tically every item entering into furniture production, the larg- 
est increase has been in the cost of lumber. Roughly, lumber 
costs increased about 200 per cent during the year 1919, and 
a total of 300 per cent since before the war. Something like 
75 or 80 per cent of the raw material for furniture manufacture 
is lumber or plywood. Average prices paid by furniture fac- 
tories on No. 1 common 4/4 red gum were in January, 1916, 
approximately $27.50 per thousand board feet; in April, 1919, 
?49.50; and in April, 1920, $170. No. 1 common 4/4 sap gum 
rose from $24 in January, 1916, to $95 in April, 1920. No. 1 
common 4/4 plain oak, another wood largely used in furniture 
nraking, during the same periods increased from $37.50 to $160. 
Quartered oak, firsts and seconds, 4/4 increased from $90 in 
January, 1916, to $310 in April, 1920; and No. 1 common 4/4 
basswood, from $29.50 in January, 1916, to $125 in April, 1920. 
Wholesale veneer prices have risen in proportion; between 
January 1, 1916, and April 1, 1920, i inch gum increased from 
$10 to $60, ^ inch and A inch gum, from $4 to $16; i inch 
poplar, from $16 to $65 ; and quartered white oak on the aver- 
age, from $17 to $52 per thousand square feet. 

Higher lumber prices are multiplied in retail prices of furni- 
ture. This nmy be illustrated by a single example. The lum- 
ber for a medium quality plain dresser cost $2.72 in March, 
1919, while in February, 1920, the same material cost $7.65, an 
increase of practically $5. Dealers are reported to add usually 
from 75 to 100 per cent to the factory price to cover their 
own selling costs and profit. An increase in lumber cost to the 
furniture manufacturer of $5 adds from $9 to $10 to the re- 
tail price, and the purchaser of the dresser actually pays for 
the lumber which goes into it three or four times prewar prices. 

Such conditions as have existed during the past year- — and 
the lumber situation has been a material factor in this — have 
injected a very large speculative element into the furniture 
industry. In many cases the furniture maker is not sure of 
his lumber or what it will cost until the time of its delivery. 
He can neither plan future output nor estimate future costs. 
He safeguards his own interest through higher prices to the 
retail dealer, who, in turn, can be certain neither of the filling 
of orders nor of the cost of his stock until delivered. All of 
this uncertainty and speculative character encourages, and 
to some extent necessitates, increased prices all along the line, 
including finally the price to tlie consumer, who pays not only 
for increased costs but for business risks. Furthermore, pur- 
chasers, since they must pay high prices, demand high-grade 
furniture; and this, together with the widespread disappear- 
ance of local timber supplies, makes more and more difficult 
the position of the small factory producing comparatively low- 
priced furniture, and tends to centralize manufacture in the 
larger concerns. 

THE VENEER INDUSTRY. 

Aencer manufacture is a rapidly growing industry which sup- 
plies furniture makers, manufacturers of musical instruments, 



10 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



the automobile industry, box malcers, etc. For high-grade 
veneer hardwoods are used almost exclusively. The industry 
consumes annually the equivalent of about 780 million board 
feet of high-grade material, the bulk of which can be secured 
only from virgin stands. The demand among hardwoods is 
cliiefly for red gum and, second, for white oalf. One section of 
the industry, which uses such northern hardwoods as maple, 
birch, and basswood, is located in the I^ake States. As in the 
case of many other hardwood-using industries, the veneer in- 
dustry lias for .some years been centered mainly in the Middle 
Western States. Supplies, at first local, are now largely in the 
South, and the niiun demand has been transferred from oak 
to gum. 

The veneer situation is similar to that described for other 
forest product.s — short supplies, abnormal demands, and com- 
petition, in this case among such consumers as phonograph 
makers, manufacturers of other musical instruments, the auto- 
mobile industry, and furniture manufacturers. As indicated in 
the preceding discussion on the furniture industry, wholesale 
veneer prices have increased from tluee to four times between 
January 1, 1916, and April 1, 1920. 

Log prices have risen in proportion. Indiana white-oak logs, 
20 inches and over in diameter, have increased during the 
same period from $75 to $200, and flitches from $100 to $300 
per thousand board feet. 

In general, there is only one-fourth of the normal supply of 
veneer flitches and logs in sight. Practically the only firms 
not experiencing extreme difficulty in securing supplies seem 
to be those factories which can still obtain local timber. In a 
few agricultural regions reserve stocks in farmers' wood lots 
have been drawn out by the current high prices. The scarcity 
of logs has compelled some factories to close down. Veneer 
and ply-wood production, while nearly normal in September, 
1918, had fallen approximately to 80 per cent between January 
and March, 1919, to 60 per cent in November, to 50 per cent 
in December, and is now estimated at not over 40 to 50 per 
cent. 

The veneer industry requires high-grade material. It takes 
practically clear logs, generally 16 inches and more in diameter 
at the small end. The industry mu.st, for its higher-grade prod- 
ucts, depend very largely' upon the fine old timber found al- 
most entirely in virgin stands. The general depletion of hard- 
wood stands has made tlie industry, along with many others 
which accept only high-grade material, primarily dependent 
upon the only reserve of virgin hardwoods of any extent — the 
.southern Mississippi Valley. Here logging operations have been 
seriously handicapped by adverse weather and other conditions, 
and as a result log .supplies for the industry as a whole have 
fallen off 75 per cent. Veneer and ply-wood production have 
fallen off 50 per cent, wholesale prices have gone up from 
three to four times, and manufacturing concerns in the same 
and competing industries are bidding frantically against each 
other to secure the inadequate supplies of veneer stock avail- 
able in order to meet their current demands. The consumer 
pays the full bill of increased log and veneer prices, and 
undoubtedly more, in the advancing prices charged for final 
products. 

THE HANDLE INDUSTRY. 

For the high-grade hickory and as!i required by the handle 
industry no satisfactory substitute has yet been found, and 
these two woods make up about two-thirds of the total used. 
The supplies now come mainly from tlie South. Here the most 
accessible timber has been taken. The few large concerns main- 
tain large and expensive organizatiotis, which literally comb 
the country to secure material. More and inore it is becoming 
necessary to work into the districts remote from transportation 
facilities. Practically the entire territory within which hickory 
is found in commercial quantities is thus covered. 



In the case of ash the situation is said to be even more serious. 
The industry has preferred the denser northern upland ash for 
handles. The swamp-grown ash of the Mississippi bottom lands 
has a smaller percentage of the dense material and has been 
less sought up to the present' time. This has greatly limited the 
area from which the wood has been secured. Ash in sufficient 
quantities to support the handle and other competing industries 
is practically gone, therefore, from the Middle Western States 
north of the Ohio. It is predicted by one man thoroughly fa- 
miliar with conditions that five years more will practically see 
the finish of ash timber in any quantity in this section. 

The demand for ash and hickory handles is so great that 
manufacturers can not meet requirements. The export demand 
is said to be even greater than before the war and American 
liandles are being shipped to all parts of the world. 

Average prices of handle material are practically unobtain- 
able because of the great variety in which such material is 
purchased — logs, bolts, dimension sizes (split, hewn, and sawn"), 
Hitch, and plank. While prices quoted are from two to three 
times those which obtained before the'war, manufacturers state 
that in practice they are paying any price necessary to get 
supplies. They find themselves in active competition with other 
industries requiring hickory and ash, and particularly with the 
manufacturers of automobile wheels. 

Average wholesale prices of standard size hickory handles 36 
inches long have advanced from $1.20 per dozen in 1916 to 
.•f^.oO per dozen in 1920. Retail prices, which were from 25 to 
30 cents per handle in 1916, are now 50 cents. 

One of the effects of the exhaustion of local timber is the 
gradual elimination of the small handle factory. When timber 
can no longer be secured locally, the only source of cheap sup- 
plies, large organizations become essential in order to cover a 
large territory. Without the necessary capital for this the 
small concern must give way to the large manufacturer. There 
is said to be a steady drift toward concentration of handle 
manufacture by lai^ge concerns and the disappearance of local 
industries. 
THE VEHICLE AND AGRICULTURAL IMPLEMENT 
INDUSTRIES. 

The vehicle and agricultural-implement industries compete 
tor liickory and ash with the handle industry, and in addition 
use other hardwoods, such as oak, for which they must com- 
pete with such industries as the furniture makers. They are 
located mainly in the Middle West, but now derive most of 
their wood supplies from the South. A number of far-sighted 
organizations are said to have purchased more or less extensive 
hardwood tracts some years ago, from which they are now able 
to draw their wood supplies in part at least. For the re- 
mainder they depend on outside purchases. 

To secure hickory, which occurs scatteringly over large areas, 
the vehicle and agricultural-implement industries ordinarily 
maintain extensive buying, logging, and milling organizations 
in the South. They draw upon every conceivable source — 
farmers' wood lots, small mills, large sawmills, and even special- 
ized operations designed to secure hickory alone. 

These concerns in general carry in stock about a two years' 
supply of special-dimension stock. Hardwood lumber prices 
have now gone so high that a number of them are making pur- 
chases in the open market only when prices do not exceed a 
prescribed maximum, and amounts secured have f?illen to 
about one-quarter of their utilization. These industries have 
found in the case of farm implements that it is impossible to 
increase the prices of their products beyond a certain point 
without a marked falling off in sales. The result is that the 
material in the open market goes to the industries which are 
able to pass increased costs on to the consumer. Another result 
has been the withdrawal from the field of a number of pur- 
chasing organizations. 



TIMBER DEPLETION, PKICES, EXPORTS, AND OWNERSHIP. 



11 



Practically tlu> only case in the vehicle and implement in- 
dustries in which the scale of buying has not been reduced is 
for automobile wheels and other automobile purposes. Here 
demand absorbs all the supply, is constantly becoming greater, 
and as yet there seems to be no limitation as to price. Makers 
of automobile wheels say that they can still get the material 
required if they make sufficient effort and pay the price, but it 
is necessnry to go farther and farther away for it. A very 
careful analysis of cost data by one concern shows that the 
largest element in recent cost increases is securing special 
stocks such as hickory from remote and' inaccessible regions. 

The preceding discussion applies particularly to the large con- 
cerns. Small factories without large organization and outside 
connections for securing supplies are laboring under more 
seriou.s difficulties, through the interruption of normal chan- 
nels of distribution. 

Material is secured practically green. Neither the lumber 
nor the vehicle industry is adequately equipped with kilns or 
the trained personnel to kiln-dry the refractory hardwoods in 
the large sizes used. Excessive losses, in some cases running as 
high as 40 per cent of the material and even higher, are re- 
ported. This is merely another phase of the situation hardly 
known outside of the industries most directly concerned, grow- 
ing directly out of a shortage of supplies and aggravating the 
shortage still more. 

The many inquiries received by the Forest Service from 
vehicle and implement makers asking for information on pos- 
sible substitution for the woods used in vehicle making is merely 
another indication of the difficulties in getting supplies at the 
present time, and of uncertainty as to the future. Because of 
the trouble and uncertainty of securing hickory and the rapidly 
increasing prices, vehicle manufacturers are substituting steel 
where possible, even though this involves still higher prices. 

THE NEWSPAPERS. 

High prices and serious difficulties as to supplies are by no 
means confined to lumber. The newsprint situation has been 
very much in tlxe foreground, particularly since the middle of 
1919. Practically the only newspapers in the United States, 
from the large metropolitan dailies to the small country news- 
papers published weekly, which have not experienced serious 
difficulties are those having long-term contracts or those for- 
tunate enough to produce their own newsprint. 

Under prewar conditions newsprint paper was contracted 
for on a yearly term tasis at $2 a hundred pounds or less. 
Contract prices during and since the war have risen to $3.50, $5, 
ifG, and at the present time even to $7, and it has been reported 
that 75 per cent of the existing contracts provide for a price 
readjustment at the end of every three or six months. Pre- 
war prices included freight ; present prices do not. Few news- 
papers are now able to contract for their entire requirements. 
Tlie smaller newspapers entirely and the larger papers to a very 
material extent must now depend upon the spot market, in 
which the full effects of competition for an Inadequate supply 
are felt. In such competition there is full opportunity for specu- 
lation. Prewar spot market prices of about $2 have risen rap- 
idly, particularly since January, 1920, until now sales reported 
at $15 as a maximum, and even higher rates are predicted. At 
$15 the paper alone for a 32-page newspaper would cost 7J 
cents. One eastern newspaper, with a consumption of 6,000 
tons, has estimated that its 1920 paper bill will be $72,000 in 
excess of that for 1919. A western paper estimates that its 
1920 paper bill will be $450,000 more than that for 1919. 

The cost of newsprint is said to be from one-third to one- 
half the total cost of the entire newspaper. To meet increased 
costs publishers must increase revenues either by raising sub- 
scription prices or advertising rate.?, or accepting more advertis- 
ing. The acceptance of more advertising means either the use 



of more paper or the elimination of reading matter. The ratio 
of reading to advertising matter before the war is said to have 
been about 60 to 40, and it is reported that this ratio is now 
reversed. Some increases have been made in subscription rates, 
but the chief source of larger returns has been through more 
advertising and higher advertising rates. The newspapers which 
have not been able to increase the amounts of advertising and 
advertising rates have been hard hit. Advertising rates during 
the past year have risen 35 per cent or more. Increased ad- 
vertising costs, designed partly to pay increased operating 
expenses and partly to reduce newsprint consumption, are passed 
on to the consumer. 

Newspapers have been driven to extraordinary measures. 
Advertising has been refused. One New York paper is reported 
to have refu.sed six pages of advertising for a single issue. 
Another New York paper is reported to have refused for a 
single issue advertising which would have returned $14,000. 
Attempts have been made to eliminate waste, and the size and 
number of editions have been cut. Features have been cur- 
tailed or eliminated, the proportion of advertising to reading 
matter has been largely increased, and efforts to increase cir- 
culation have been suspended. 

Unfortunately the situation is generally regarded by the 
public as a whole as one which can be easily remedied within 
a few months, and it is not reaUzed that the life of the pulp 
and paper industry in the regions of its present development 
is absolutely dependent upon rapidly- failing timber supplies, 
while little or no effort is being made toward their perpetuation. 

THE SITUATION SUMMARIZED. 

If the industries considered are representative of general 
conditions, and there is every reason to believe that they are, 
the lumber situation of the past few months has, for many 
industries and many classes of consumers, been one of serious 
shortages of supplies, of great demands, and of uncertainties 
in securing satisfactory amounts of desired materials. Rapidly 
rising prices have reached the highest points that have ever 
been known for lumber and for practically every other forest 
product consumed in the United States. Market conditions 
have been unstable, and it has been impossible for many con- 
sumers to plan with any certainty on cost of materials. The 
output of industries which depend upon lumber and other wood 
products has been very much reduced, and in an extreme case 
has gone as low as 50 per cent of normal. 

The entire nature of competition in the case of forest prod- 
ucts has changed. I'rior to the war the producers of lumber, 
newsprint paper, and other forest products competed with 
each other for business. Competition during the past few 
months has been very largely among consumers for generally 
inadequate supplies. Under any conditions such a reversal in 
the fundamental situation would result in higher prices ; but 
the shortage and demands have been so extreme that whole- 
some restraints, as to prices which might safely be paid have 
been removed, and in many cases it has been possible to pass 
on to the consumer, and even to augment, almost any lumber 
price increases. This has not been universally true. There 
lias been some difference between industries in the extent to 
which they could go. Apparently limitations have been felt 
more by industries producing the necessities than by those with 
products wliioh fall rather in the class of luxuries. 

The furniture maker finds himself handicapped in competing 
with the maker of musical instruments. The manufacturer of 
agricultural implements withdraws his buying and manufac- 
turing organizations from the field because he can no longer 
compete with the manufacturer of automobile wheels. The 
largt! and well-financed organizations, able to draw their sup- 
plies from distant sources, have fared much better than the 
small manufacturer with limited capital who must secure his 



12 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



raw material locally. Unfortunately, in most cases It is the I 
local supplies which have been most depleted, and the existing 
situation has toiuled to eliminate much more rapidly than in 
normal times the small concern in the best position to supply 
cheap products. 

With uncertainty as to supplies, with equal or greater uncer- 
tainty as to the costs, and with almost frantic bidding between 
members of the same industry and between different industries 
for materials, a larger speculative element than has ever before 
been known has been introduced into tlie sale of lumber alid its 
further manufacture. This, again, has increased prices to the 
ultimate consumer, and in extreme cases, such as dwelling 
houses, has removed the possibility of purchase from large 
classes. Many industries which were operated on a compara- 
tively stable basis under prewar conditions now find themselves 
upon an uncertain and highly speculative basis. 

Other changes which are much less known, but almost equally 
bad, might be mentioned. One will suffice. The hardwood- 
producing industry commonly held its otoeks for several months 
or a year for seasoning. Consuming industries commonly car- 
ried in stock supplies sufficient to meet one or even two years' 
requirements. When material was needed it was already sea- 
soned for manufacture. Artificial methods oi drying were 



largely unnecessary and neither equipment nor personnel was 
provided. Growing out of the conditions described, a very great 
increase in artificial drying has become necessary ; and this 
has been accompanied by difficulties in securing an adequate 
number of kilns and great losses in initial kiln operating, some- 
times reaching 40 per cent or even higher and aggravating the 
shortage. 

Enough examples have been given to show the almost limit- 
less ramifications through which shortages and high prices of 
forest products reach the public. The building industry, agri- 
culture, the railroads, the press, house furniture, tools — these 
and ■ their like concern our entire population. • Shortages and 
high prices, accordingly, seriously affect the whole Nation. 

With a realization of the existing situation with respect to 
representative industries and classes of consumers, the facts as 
to depletion and prices acquire greater significance, and it is 
possible to analyze to better advantage the factors which are 
responsible. The discussion falls logically under two heads : 

1. The abnormal conditions which have affected the forest 
industries and their products along with all other industries and 
commodities. 

2. The cumulative effect of forest depletion, both in the coun- 
try as a whole and in the more important timber regions. 



ABNORMAL CONDITIONS IN RELATION TO PRESENT SCARCITY AND HIGH PRICES. 



The principa' effect of the war upon the lumber industry was 
10 reduce the stocks available for ordinary purposes, through 
curtailment of production and through the diversion of large 
quantities of timber to special war uses. War requirements led 
to the placing of large orders for unusual sizes and dimensions 
for such products as Army wagons and wooden ships. Through 
Covernment regulation of transportation, of the use of capital, 
(if new construction, and even of extensions and repairs, ordi- 
nary distribution was practically discontinued before the sign- 
ing of the armistice. The lumber cut of the country fell from 
a prewar average of around 40 billion feet to a reported cut of 
only a little more than 33 billion feet in 1917, and of less than 
30 billion feet in 191S. A very considerable proportion of this 
material, as previously indicated, was utilized for essential 
war purposes. 

Surplus woods and mill labor, skilled and unskilled alike, 
was rapidly drawn into other industries or into the fighting 
forces. In addition the lumber industry found itself in com- 
petition for labor with other industries producing war essen- 
tials. By the time of the cessation of hostilities a very con- 
siderable percentage of the labor ordinarily employed in himber 
production had been diverted and scattered. Lumber stocks at 
the mills and those in the .wholesale and retail yards of the 
country were very short and badly broken. The industry, there- 
fore, came out of the war more or less disorganized as to labor, 
production, stocks, and markets. 

Following a period of gi-eat uncertainty on the part of 
the public, as well as of the industry, as to possible develop- 
ments, the demand for lumber began and rapidly grew far be- 
yond any anticipation. The shortage of houses was already 
serious in the United States at the beginning of the war. Dur- 
ing the war it became very much worse. Without any stimulus 
whatever the demand for dwelling houses would have absorbed 
large quantities of lumber. The " build-a-home " movement was 
fostered by the Federal Government itself. 

Industrial construction had during the war also fallen far 
behind the growing demands of the country. Railroad purchase 
for repairs had necessarily been held to a minimum and exten- 
sions had practically been eliminated. The growing freight 
requirements of the Country necessitated large-scale betterments 
and material extension. Similar denu^nds had piled up during 
the war in practically all of the industries which use lumber. 



This accumulated demand soon absorbed the short stock avail- 
able, and lumber manufacturers were overwhelmed with orders. 

The lumber industry found itself unable to increase produc- 
tion rapidly. The output in 1919 was below normal in all the 
pnncipal lumber regions of the country, with the possible 
exception of the South. In many of the former regions of large 
lumber output, the Lake States, New England, New York, Penn- 
sylvania, and the Southern Appalachians, the timber is so 
largely gone tnat there was little opportunity for material ex- 
pansion in cut to meet abnormal demands. In regions with 
timber reserves other factors have held the cut down. 

In the southern pine region bad weather hampered logging 
operations during the latter part of 1919. Precipitation was 
far above the average. This reduced the log production, and 
even caused shortages which compelled many mills to run on 
part time. During the first 11 months of the year 135 sub- 
scribing mills reported to the Southern Pine Association a 
total loss of 80,213 hours, or approximately 60 working days 
each, 41,878 hours or 31 working days each, being due to a 
shortage of logs. On the basis of normal production this loss 
represented a decrease in production for the 135 mills of nearly 
000,000,000 feet. 

In the southern hardwood region weather conditions have 
been unfavorable since the fall of 1918. In the fall of 1919 
the conditions, already very bad, became much worse, and 
effective logging or in some cases any logging has become 
practically impossible through repeated rains and floods. Nor- 
mal log deliveries for one group of hardwood mills in October 
and November, 1919, were but one-third of the quantities deliv- 
ered during the same months in 1916. 

Some of the labor drawn away from the lumber industry 
during the war preferred other employment and remained in 
the tovras and cities or in other sections of the country. It 
is estimated that southern pine operators were confronted 
with an average labor shortage of 20 per cent, and in many 
other lumber-producing regions operators found themselves un- 
able to secure and hold full crews. 

The industry has been obliged to pay higher wages and grant 
shorter hours, and has possibly suffered from decreased effici- 
(>ncy. In the cas(> of one operation in the South it required 23 
man hours In July. 1914, to produce 1,000 board feet of lumber, 
while in July, 1919, it required 37i man hours. Again, in July, 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



13 



1934, it required 134 men on tlie payroll to maintain a full crew 
of 100 men per day, while in July.' 1919, 153 men were carried 
to maintain the same sized crew. Many operators in the 
Appalachian hardwood region say that they hardly know from 
day to day whether or not their mills will run. Illustrations of 
this character could be multiplied almost indefinitely for all 
parts of the country, but those already given sufficiently indi- 
cate the general situation. The unstable character of the lum- 
ber industry has lieen in no small degree responsible for its 
inability to secure and hold a desirable class of labor, particu- 
larly in logging. 

Dependence upon the South and the Northwest for timber 
has placed a greater burden upon the railroads of the country 
thau they could carry under the disorganization following the 
war. The car shortage is estimated by various authorities at 
from 200,000 up. It is reported from the southern ■ hardwood 
territory that only 60 to 65 per cent of the cars required for 
logs and lumber can be obtained. The secretary of the Cali- 
fornia Sugar & White Pine Co., a sales organization which 
served 35 mills in 1919, reports materially curtailed shipments 
in September, October, and November, due to a ear shortage of 
65 per cent, \\hile the railroads do not altogether agree as to 
the extent of the shortage, it is certain that difficulties in secur- 
ing cars, freight congestion, and embargoes have all served to 
accentuate difficulties in securing lumber supplies. Limiber, as 
one of the most bulky commodities, is always one of the first to 
suffer in case of freight congestion. 

A disorganized industry, short stocks, abnormal demands, 
and reduced production have all contributed to high prices for 
lumber. Even though it had still been possible to produce 
lumber in quantity in each of the regions from which it has 
been so largely depleted — New England, New York, Pennsyl- 
vania, the Lake States, and the Southern Appalachians — lumber 
prices would still have risen in response to other conditions 
which have grown out of the war. Price increases for other 
commodities are significant in this connection. As shown by 
the Department of Labor statistics, the prices for all commodi- 
ties had, considering the year 1890 as 100 per cent, risen to 



250 per cent in January, 1919, and to 293 per cent in December, 
1919, with an average for the year of 263 per cent. Using 1913 
as 100 per cent, prices for January, 1919, had risen to 203 per 
cent, and in December, 1919, to 238 per cent. Regardless of 
every other conceivable condition, a very substantial rise in 
lumber prices would have been inevitable from such causes as 
the enormous credit expansion growing out of the war and the 
accompanying currency inflation, causes which are responsible 
for large price increases in all other commodities. It is un- 
necessary to dwell upon these general causes, but they must 
be taken fully into account in any attempt to analyze the 
extent to which timber depletion is responsible for price in- 
creases. 

Abnormal conditions affecting forest products have not ob- 
tained alone in the case of the lumber industry. One further 
example, that of newsprint, will be given. Because of war re- 
quirements, newsprint paper production suffered less than 
lumber. The industry was- less disorganized and the response 
to increased demand was much more prompt. The Federal 
Trade Commission reports that newsprint production during 
the fiscal year 1919 exceeded that of 1918 by 8 per cent. Pre- 
war production had reached 1,313,284 tons in 1914. During the 
20-year period preceding the war the demand for newsprint 
had increased practically without a break by 200 per cent. Inci- 
dental to the increase in demand which might have been ex- 
pected normally there grew out of reconstruction the most 
extensive use of advertising which the United States or possibly 
any country has ever seen. Within the year national advertis- 
ing increased greatly. Advertising as a whole in 1919, as shown 
by nearly 100 newspapers in a little less than 20 of our largest 
cities, Increased over that of 1918 by approximately 40 per cent. 
During the first two or three months of 1920 the amount of 
advertising exceeded that for a similar period in 1918 by some- 
thing over 50 per cent. This demand created, in spite of the 
restriction of reading matter by the average new.spaper, an 
abnormal demand for paper and was a powerful factor in the 
unprecedented rise in newsprint prices which has already been 
discussed. 



STEADY PROGRESS OF FOREST DEPLETION. 



FOREST DEPLETION AND MIGRATION OF THE 
LUMBER INDUSTRY. 

Each successive chapter in the hLstory of the lumber Industry 
in the United States has been a story of depletion and migra- 
tion. In softwoods it is a history of regional industries, each 
developing in its turu, dominating the consuming uarkets of 
the country, and declining at last so far as to be unable to meet 
the local requirements of its region. Each has had the same 
essential features of beginning, rise, and fall from light culling 
operations to clean cutting of good timber and poor alike and 
of the shifting of cut from the more to the less desirable species. 
The story of each region will be taken up in detail, but the main 
outlines should first be made clear. 

In New England lumbering early became a leading industry, 
supporting local needs, furnishing the basis for the early ship- 
building industry, and providing exports. The industry ex- 
panded very slowly, and owing to the shifting of the cut from 
one section to another, from one species to another, and finally 
from virgin stands to second growth, partly on deserted farm 
lands, production did not reach the maximum until as late as 
1907. Since then it has been falling rapidly. 

New York followed New England as the center of softwood 
lumber produeton and was the leading lumber State in the 
country in 1850, although the greatest volume production was 
reached from 10 to 20 years earlier. Pennsylvania followed 
New York, and led all the States in 1860, but has now declined 



until one city district consumes more than the total lumber cut 
of the State. 

\Vhite-pine operations in the Lake States began with a sin- 
gle sawmill in 1832; eastern shipments were being made three 
or four years later; and the culmination was reached in 1892 
with a cut of nearly 9 billion feet. Dreary wastes, dismantled 
sawmills, deserted towns, and an insignificant pine output of 
a single billion feet in 1918 are depressing reminders of the 
day when Lake States lumber supplied the markets of the 
country from the Rockies to the Atlantic Ocean and from the 
Canadian boundary literally to the Gulf. 

The great development of the southern industry began in the 
seventies and increased rapidly to what was probably the 
maximum, about 16 billion feet, in 1909. In its turn, southern 
pine dominated the markets little if any less completely than 
white pine; but the South is following the course of other 
regions, and the remaining supplies of virgin pine are only 
about one-fifth of the original stand. Within a single decade 
southern pine production promises to exceed by little, if any, 
the needs of the South. 

A great start has been made in the last chapter of the history 
of virgin softwood stands. Since 1894 Pacific coast and Rocky 
Mountain timber has been forcing its way increasingly into 
the middle western and eastern markets. Within the year it 
has dominated those of the Lake States and has even entered 
in appreciable quantities those of the South itself. To the West 
only, of all our heritage of magnificent softwood forests, can 



14 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



the country look to an increasing cut; but even here there are 
already focal evidences of depletion, warnings that the con- 
clusion of the story will be the same as that of other regions 
and in far less time than has been estimated. 

Hardwood depletion and the migration of centers of pro- 
duction has followed along much the same line, although 
regional boundaries have been much less distinct. Cutting 
began eai-ly in New England and along the Atlantic coast, 
.spread slowly to the westward through New York and Penn- 
.sylvania as local supplies were cut out, and became important 
in Ohio and the Middle Atlantic States after water and rail 
transportation was developed. From here it spread north into 
the Lake States and south into Kentucky and Tennessee and 
the southern Appalachian Mountains. The stands of these 
vai-ious regions have been successively depleted. In New Eng- 
land and New York, aside from second growth, largely in farm 
wood lots, there remain only the stands of hardwoods in the 
North. The commercial cut of the Middle Western States is 
almost a thing of the past. That of the Lake States has fallen 
off materially, as has also even that of the southern Appa- 
lachians. The end of the cut in the Appalachian States is 
pretty definitely in sight. The only reserve of importance is 
the southern Mississippi Valley, and even here it is doubtful 
if future production will for any length of time materially 
excei'i! the average output of the last few years. 

BASIS FOR DATA. 

Before taking up the various timber regions' the basis for 
the data used should be given. If should be recognized that 
thoroughly reliable data on such subjects as the remaining 
stand of timber, its quality, rate of growth, and extent of 
depletion, and on the forest areas of different classes, can 
be obtained only by a thoroughgoing timber survey requiring 
two or more years. Nothing of this character has ever been 
attempted in the United States. 

More has been done in estimating the amount of saw timber 
than on aliy other of tlie subjects mentioned. The most com- 
prehensive data on timber stand were secured by the Bureau 
of Corporations. A part of the country only was covered for 
timber of saw-timber size, and such questions as the volume of 
material below saw-timber size, extent of depletion, rate of 
growth, the requirements of our industries, etc., were not in- 
cluded. Other available data have covered this and other 



■ Figure 1 shows diagrammatically the more or less arbitrary State 
groups which are used in part for statistical purposes only. It shows 
also the principal saw timber sections of the United States. The 
i-egions of the discussion do not follow either consistently, but the 
areas Included In each are indicated in the text. The State groups used 
are made up as follows : 

New England : Maine, New Hampshire, Vermont, Massachusetts, 
Rhode Island, and Connecticut. 

Middle Atlantic : New York, New Jersey, Pennsylvania, Delaware, 
and Maryland. 

Lake : Michigan. Wisconsin, and Minnesota. 

Central : Ohio, Indiana, Illinois, West Virginia, Kentucky, Tennessee, 
Iowa, Missouri, eastern Kansas, and eastern Nebraska. 

South Atlantic and East Gulf : Virginia, North Carolina, South Caro- 
lina, Georgia, Florida, and Alabama. 

Lower Mississippi: Mississippi, Arkansas, Louisiana, eastern Texas, 
and eastern Oklahoma. 

Kocky Mountains : Idaho, Montana, Wyoming, Colorado, western 
South Dakota (Black Hills), New Mexico, Arizona, Utah, and Nevada. 
Pacific coast : California, Oregon, and Washington. 
That part of the Kaniksu National Forest in Washington is in- 
cluded in the Rocky Mountain region, while those parts of the El- 
dorado, Inyo, Mono, and Tahoe National Forests in Nevada are in- 
cluded in the Pacific coast region. 

Tlie comparatively small area of rather opeij woodland, chiefly on 
farms lying in the Great Plains between the ninety-seventh meridian 
and the^ Rocky Mountains, is not considered in the report. Some 
100.000,000 to 150.000,000 acres of low-grade woodland and scrub, such 
as open juniper and pinon of the West, scrubby mountain stands, and 
chaparral, are also omitted. 



pha.ses of timber supply only for parts of States or regions. 
Some of the timber remaining In the United States has never 
been cruiseil under any method. That cruised has been esti- 
mated by different methods and by different men, and also at 
different times when widely varying standards of utilization 
were in effect. For the State of Washington, for example, a 
large percentage of the estimates date back to 1890 and 1895, 
when " red fir " and hemlock were considered inferior species 
and given little attention. 

Possibly the estimates secured for the southern pine region 
are as satisfactory as any. Here it was possible to obtain the 
results of a recent survey which brought together the best 
estimates available from a large percentage of timber owners. 
For some regions it was possible to do little more than revise 
the Bureau of Corporations' estimates by subtracting the cut and 
depletion as offset by estimated growth. The Bureau of Cor- 
porations' estimates form, in part, the basis for the data used 
in the southern Mississippi Valley hardwood region and the 
Pacific Coast States. In all cases, however, such data were 
supplemented by additional estimates, wherever obtainable, 
from such sources as later and more reliable cruises of indi- 
vidual holdings and county tax estimates. 

For hardwood stands in particular the available estimates 
are not satisfactory. The Bureau of Corporations' study covered 
only the hardwoods of the southern Mississippi Valley, which 
were at that time regarded as having comparatively little value, 
and satisfactory estimates could not be secured. Many of the 
industries which are now dependent for their raw materials 
upon the hardwoods are in great need of accurate information as 
to the extent of existing stands and what they can count on for 
the future. The data available show, however, that the future 
is very uncertain. 

For New York results are based on a questionnaire to private 
owners in 1918 which covered the territory only in part. Simi- 
lar data were available for parts of New England. Only a 
part of the estimates for National Forest timber is based on 
thoroughgoing cruises. 

The report embodies the first attempt to cover for the entire 
country the total volume of matei'ial below saw-timber size in 
cubic feet. It can only be an approximation. 

The data on forest areas have been compiled from a great 
variety of sources secured for different purposes by different 
organizations with varying degrees of accuracy. For several 
of the classifications, such as productive and unproductive areas, 
the data are fragmentary. 

The estimates of growth are based on a limited number of 
studies of growth made at various times during the past 20 
years. While representing somewhat more detailed data than 
were ever before available, they are still very inadequate and 
no claim is made that the figures given are more than an 
approximation. 

In response to the request of the Senate, the Forest Service 
has endeavored to describe the situation in fairly specific 
terras, using the best information available. It recognizes that 
much of the data used lacks scientific accuracy and is tenta- 
tive rather than final in character. An attempt has been made 
to utilize every available source of information and to check 
the figures by the judgment of well-informed men in the differ- 
ent regions. 

While an exhaustive and detailed sijrvey of the forest re- 
.sources of the United States is necessary to establish these 
figures with finality, there can be no question as to the broad 
facts of depletion wliicli they indicate. 

NEW ENGLAND. 
THE GROWTH AND DECLINE OF THE LUMBER INDUSTRY. 
New England has passed through every stage of forest ex- 
ploitation from the days when only the best white pines and 
oaks were merchantable to present dependence upon outside. 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



15 



lumber and pulp wood. Early cutting was for local consump- 
tion, shipbuilding, and exiiort. The'bomesteads of the first few 
generatlous were built of the best virgin timber. Shipbuilding 
early became one of the chief industries, for which the white 
pine and oak forests furnished the timber and pitch pine the 
naval stores. The heavy cutting of early days, particularly 
for fuel, produced a shortage of wood as early as 1840 in many 
sections of New England. With the introduction of coal the 
industrial centers grew, and the movement to the cities and to 
the new lands of the West i-esulted in wholesale discontinuance 
of cultivation. Much of the second growth timber cut to-day 
dates from this period. 

From the Revolution to about lS-10 white pine made up almost 
the entire softwood cut in New England ; but soon after that 



land rose steadily until it reached a maximum of 3,170 mil- 
lion feet in 1907. This period of increased production was 
due to the introduction of portable sawmills, which made small 
scattered lots available, to the higher prices of low-grade lumber 
owing to growing scarcity throughout the country of the better 
grades, and to the large amount of second growth on deserted 
farms. 

The lumber cut in 1907 was about 7 per cent of the total for 
the country; in 1918 It had dropped to 1,400 million feet, or 
about 4i per cent, and in actual amount it was less than half 
as much as in 1907. Particularly marked is the decline in 
softwoods. While in 1907 the cut of softwood in New England 
formed 7.6 per cent of all the softwoods cut in the country, in 
1918 it had dropped to 4.3 per cent. 




spruce operations began. By 1870 the original white pine was 
practically cut except for scattered trees in northern Maine ; 
and by 1880 the second growth pine forests were yielding an 
annual cut of 200 to 300 niillion board feet. With the extensive 
use of low-grade pine for boxes and matches, this later increased 
to GOO million feet. 

Soon after it became known that wood pulp was a cheap 
substitute for rags in paper making, mills were built in north- 
ern New England as well as New York and the chief develop- 
ment of forest industries during the past 30 years has been in 
paper manufacture. Spruce alone was used at first, but now 
large quantities of balsam and hemlock are taken. For book 
paper poplar is used chiefly. Probably four-fifths of the pulp 
wood still comes from the old-growth forests, but an ever-in- 
creasing proportion nnist come from second-growth stands. 

Although the lumber business of southern and central Maine 
reached its peak about 1S.50, the total lumber cut of New Eng- 



ORIGINAL .\ND REMAINING FORESTS. 

Area. — With the exception of a few small areas, New England 
in 1020 was a virgin forest, comprising some 39 million acres. 
In 1920 not more than .5 per cent of this virgin forest remains. 
The pre.sent forest area is nearly 25 million acres. Of this 
about 8 per cent, or 2 million acres, is virgin forest, chiefly In 
Maine, with scattered areas in New Hampshire and Vermont. 
The last remnant of virgin forest in Connecticut was cut within 
the past decade. Of the 24,700,000 acres now classed as forest 
land 44 per cent, or 10.700,000, is in saw timber or pulp wood, 
while 34 per cent, or S.370,000 acres, contains nothing but fuel 
wood', and 22 per cent, or 5,570,000 acres, is nonproductive. 
With nearly three-fourths of the saw timber and pulp-wood area 
in Maine, the poor condition of the remaining New England 
forests is apparent. 

Stand.— The original stand of New England was probably in 
the neighborhood of 400 billion board feet, not including 



16 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



small liiulicr lit mily for posts and fuel wood. The present 
stand of shnilar material is close to 50 billion board feet, 
or about one-eighth of the original staud. The total stand of 
wood in New England is estimated to be 21 billion cubic 
feet= (equivalent to about 70 billion board feet). Of this 
40 per cent is saw timber or pulp wood and GO per cent is fit 
only for fuel. The average stand of all the wooded lands is 
lOi conls per acre. The present stand of saw timber and pulp 
wood is sunnnarized by species in the following table : 



Spruce and fir 23,971 

White pine ^'^l*^ 

Cedar 2, 789 

Hemlock 1' S"'* 

Yellow birch 2, 933 

Maple 2,897 

Beech 1-635 

Oak 1- 510 

Chestnut . ^60 

Paper birch 678 

Poplar 374 

Ash 215 

Pitch pine ^00 

Other hardwoods H''' 



Total 40, 7oa 

Softwoods 38. 480 

Hardwoods 11> 319 

Of this total stand about three-quarters is softwood and one- 
quarter hardwood. About one-half is of pulp-wood species^ 
spruce, fir, hemlock, and poplar. 

THE ANNUAL DRAIN UPON THE FOREST. 

In 1918 there were cut in New England 1,412,100,000 board 
feet of lumber and 1,446,000 cords of pulp wood. The total 
annual cut amounts to about 650 million cubic feet,' of which 
65 per cent is lumber, pulp wood, ties, etc., and 35 per cent fuel 
wood and fence posts. In addition there is a loss of about 20 
million cubic feet, due to disease, insects, and fire. The total 
annual drain, therefore, is about 670 million cubic feet.* 

THE ANNUAL GROWTH. 

The annual growth of the New England forests is e.stimated 
in round figures at 610 million board feet of saw timber. Of 
this, about 434 million feet is softwoods and 176 million feet 
hardwoods. In addition, there is a growth of 341 million cubic 
feet not suitable for lumber. The total growth is 475 million 
cubic feet.^ 



GROWTH COMPARED WITH CUT. 

The annual drain upon the saw timber of 



djout 2 billion 

board feet is nearly three and one-half times the annual growth 
of 610 million board feet. The annual drain upon the fuel wood 
of 235 million cubic feet is less by 106 million cubic feet than 
the growth of 341 million cubic feet a year. It is apparent, 
therefore, that the growth of low-grade material is somewhat 
in excess of the actual demands. In regard to lumber, pulp, and 
other high-grade material, however, the situation is anything 
but encouraging. 

THE LIFE OF THE INDUSTRY. 

About half of the entire present stand of saw and pulp 
timber in New England is in commercial tracts; the remainder 
is in farm wood lots. It is particularly from the larger com- 

= Tlitouyhout tlio report board feet of lumber are converted to cubic 
feet of .standing limber, and vice versa, on the basis of 219 cubic feet 
to 1,000 board feet for saw timber and of 500 cubic feet to 1.000 board 
feet for cordwood. 

'Equivalent to about 2,300 million board feet. 

' Equivalent to about 2,375 million board feet. 

^Equivalent to about 1.300 million board feet. 



mercial tracts that the cut of most of the higher-grade mate- 
rial comes at present. Few of even the larger timber owners 
have more than a 20 years' supply. Most of the pulp mills will 
be cut out in 20 years. Not over four or five companies own 
stumpage enough to last for a longer period. Unless Canadian 
wood is imported on an increasingly larger scale or effective 
forestry measures are introduced immediately, the pulp indus- 
try of New England will be largely a thing of the past within 
30 years. Within the next 10 years the lumber cut will prob- 
ably drop to about 1 billion board feet ; within 20 years most of 
the timber areas containing high-grade lumber will be cut off 
and the remaining timber will be either on farm wood lots or 
on a few remaining large tracts and will be made up of second 
growth or of trees which were left as worthless at the time of 
the first cutting. The White Mountain National Forest and the 
State forests may be counted upon to furnish a continuous 
supply of saw timber, but unless their areas are materially 
increased their share will be very small. 



Up to 30 or 40 years ago New England was not only self- 
supporting in timber but exported large quantities. Within 
the past 30 years it has become an importing region, and it Is 
estimated that fully 30 per cent of all the lumber used now 
comes from outside the region. This is in addition to the im- 
portations of large quantities of pulp wood. Within the next 
few years New England will have to import more than half the 
material it uses. This is of vital interest to a region that 
has about .$300,000,000 invested in wood and forest industries 
and employs in this connection over 90,000 wage earners. 

NEW YORK. 

Practically the entire State of New York was originally 
covered with a magnificent forest of white pine, spruce, hem- 
lock, and hardwoods. The lumber industry was one of the first 
to be developed. It reached its highest volume between 1830 
and 1840 and was already declining at the time of the Civil 
War. In 1850 New York ranked first among the States in 
amount of lumber cut and contributed 20 per cent of the total 
cut of the entire country. Since then it has been steadily de- 
clining in relative importance until to-day it stands in twenty- 
fifth place and contributes only 1 per cent of the total cut. Its 
actual cut has decrea.sed from over 1,300 million feet prior to 
1850 to less than 350 million. 

As early as 1856 New York ceased to be an important ex- 
porter of lumber and began to draw on Michigan for the upper 
grades of pine. Pennsylvania hemlock, southern pine, and 
cypress were used in large quantities from 1880 on, and West 
Coast woods in upper grades and special sizes began to come in 
about 1900. To-day Douglas fir from the Pacific northwest is 
a very considerable factor in the lumber market of the State. 
The steadily decreasing supply of native woods as compared 
with the increase in population is illustrated by the fact that 
New York's per capita production of lumber had fallen from 
300 board feet in 1869 to about 30 board feet in 1918. 

With the gradual settlement of the State the area of forest 
land steadily decreased until to-day it forms about 41 per cent 
of the total area. The stand of timber is estimated at approxi- 
mately 26 billion board feet, of which white pine, spruce, and 
hemlock comprise about 10 per cent each, and birch, beech, and 
maple a total of 55 per cent. Spruce and hemlock suitable for 
pulp wood but not lumber comprise some 13,400,000 cords, while 
material of all species suitable only for fuel and acid wood adds 
another 107,000,000 cords. This gives a total stand for the 
State of approximately 17.132 million cubic feet.' 

In quality, the present stand is decidedly inferior to that of 
earlier days. White pine, of the large size and high quality 



' Kquiv 



to about 49 billion board feet. 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



17 



for which the State was once famous, now furnishes little l)ut 
the poorer grades. Of the total forest area 62 per cent con- 
tains material which is suitable neither for lumber nor pulp and 
furnishes only fuel or acid wood. While the area of lands eom- 
pletel.v denuded is comparatively small, the original forests 
are being followed by stands of decidedly inferior quality, both 
as to species and grades. The damage by fire is being steadily 
reduced by systematic fire protection, but the methods of cutting 
in private lands are such that an incretisingly large area is left 
partially or wholly devastated. 

PENNSYLVANIA. 
The forest history of Pennsylvania has been similar to that of 
New York. Once practically covered with a heavy timber stand, 
Pennsylvania for many years exported large quantities of lum- 
ber. In 1860 it stood flr.st among the States in lumber produc- 
tion. As early as 1870, however, the stand of white pine, the 
most valuable species in the State and formerly one of its prin- 
cipal export woods, had diminished to such an extent that im- 
ports from Michigan began. The depletion of the white pine was 
followed by an increasing cut of hemlock and later of hard- 
woods, and the State reached its maximum lumber production 
of 2,440 million board feet in 1839. To-day it occupies twentieth 
■place in lumber production, and its annual cut of 530 million 
board feet constitutes less than 2 per cent of the cut of the 
country. 

The pre.sent forest area of Pennsylvania is estimated at ap- 
proximately 12,000,000 acres, with a stand of 11 billion board 
feet of timber. Of this 70 per cent is hardwoods, chiefly oak, 
chestnut, and northern hardwoods, and 30 per cent softwoods, 
one-half hemlock. In addition to the stand of material suitable 
for the manufacture of lumber, it is estimated that there are 
380,000,000 cubic feet of wood suitable for railroad ties and 
mine props. The total stand, including fuel wood, is 5,200 
million cubic feet.' 

Depletion in Pennsylvania has already progressed so far 
that the complete cessation of large-scale logging operations, 
of which only a few are now left, may be anticipated within 
a decade. It has reached a point where the annual lumber 
production is only 60 board feet per capita, or about one-fifth 
of the average per capita consumption for the United States. 
The Pittsburgh district alone uses more lumber than is cut in 
the whole State. Williamsport, which once had an annual 
output of 300,000,000 board feet of lumber, now has not a 
single sawmill. In those parts of the State where the forest 
constituted the .«ole resource the trail of the lumber industry 
is marked by abandoned mills and practically deserted vil- 
lages. 

The steady decrease in the amount of standing timber has 
been accompanied by a deterioration in quality. Virgin stands 
are practically gone, old-growth white pine, for example, being 
reduced to some 10,000 acres, practically all in a single tract 
which will be cut out m the next five years. Only about 50 
per cent of the total volume of wood now standing is suitable 
for manufacture either as lumber, pulp wood, ties, or props. 
The average area burned over annually is 500,000 acres, and 
much of this has been burned over again and again. In addi- 
tion to the damage from reckless cutting and fires the State 
has suffered severely from the chestnut bark disease. Nearly 
one-seventh of the entire State, once richly wooded, is said 
to be practically barren. Several counties that were once rich 
in forest and prosperous are now almost bankrupt because 
the timber is gone. 

THE LAKE STATES. 

GROWTH AND DECLINE OF THE LUMBER INDUSTRY. 

White pine.— The history of lumbering in the Lake States 
during the greater part of the past century is substantially the 
history of white-pine exploitation. Lumbering began in Michi- 



Equivalent to about 
7797—20 3 



16,600 million 



gan and Wisconsin about 1835. Pine in enormous quantities 
drew lumbermen from the East, and before 1870 these States 
captured the lead in lumber production. They held it until 
superseded by the southern pine region, between 1900 and 1910. 
The peak of production was passed in 1892, when the reported 
output was a little more than 8,900,000,000 board feet— largely 
white pine. This was an increase of 123 per cent over the cut 
of 1873. In 1899 Wiscon.sin, Michigan, and Minnesota, in the 
order named, were still the leading three States, with a total 
production of 8,700,000,000 feet, two-thirds pine; but in 1918 
they had fallen to eighth, thirteenth, and eleventh, respectively, 
;ind their total output had fallen to 3,220,000,000 board feet, 
of which only 35 per cent was white pine — mostly from Minne- 
sota. Wisconsin now produces less than the second-growth cut 
of either Maine or New Hampshire, and Michigan, from lead- 
ing the country from 1870 to 1895, now actually cuts less than 
half as much as Massachusetts. 

As the Lake States forests dwindled, white-pine lumber went 
down, both in quantity and quality, and Norway and jack pines 
and even tamarack were admitted as lower grades of " northern 
pine lumber." The fine quality timber which gave white pine 
its r<!putation is now nearly all gone. In Minnesota two-thirds 
or more of the cut is box lumber. Only small, scattered rem- 
nants of the old-growth white-pine forests remain in Wisconsin 
and upper Micliigan, and in lower Michigan the most widely 
known tract covers about 100 acres. 

Hemlock. — As the higher grades of pine grew scarce and ex- 
pensive, hemlock, once left in the woods as worthless, began to 
compete with the successively lower grades of pine introduced. 
Hemlock production reached its peak— 1,600,000,000 feet— about 
lfl06. In 1914 the cut had fallen to little more than a billion, 
and in 1918 to 800,000,000. This does not, however, include the 
cut for pulp, which would increase the total volume by about 
one-third. By affording a market for cordwood, pulp manufac- 
ture is taking the small hemlock timber along with the large 
and thus delaying oi- preventing the renewal of the supply of 
large timber. 

The northern hardwoods. — Maple, birch, beech, basswood, and 
elm form at least 85 per cent of the total stand of hardwoods 
and furnish over 92 per cent of the total hardwood cut in the 
Lake States. As with hemlock, the logging of hardwoods began 
as an aftermath of the white-pine logging. Hardwood produc- 
tion progre.ssed gradually from culling operations taking only 
the best trees of the preferred species to cuttings sucli as those 
made at present for chemical distillation and cliai'coal, in which 
even tops, limbs, and saplings are utilized. Beech was one of 
the latest species to orae into commercial demand ; less than 
two decades ago it was a common practice to leave all the 
beech, which fires later destroyed. Now, the hardwood-using 
industries absorb not merely the upper grades but anything 
which will make lumber, and in some cases even cordwood. 

The veneer industry makes a constant demand for high- 
grade logs. Such logs supply also the bulk of the upper grades 
of lumber. There has been a constantly growing demand for 
both veneer and high-grade hardwood lumber, expressed in tlie 
pronounced growth of such industries as the musical instru- 
ment and toy trades. For a considerable part of this demand 
lower grades ought to be acceptable ; but so long as the demand 
for upper grades exists manufacturers will attempt to fill it, 
and the stand will dwindle the more rapidly. 

ORIGINAL AND REMAINING STAND AND RATE OF CUT. 

The original forests occupied practically all the land area 
of Michigan, Wisconsin, and the part of Minnesota not natural 
pralrit — a total forest(>d area of approximately 112 million acres. 
Lumbering and the clearing of land for cultivation have re- 
duced the merchantable forest cover to little, if any, more than 
24,000,000 acres, about 58 per cent in farm woodlots of relatively 
snuill timber, commonly second growth, and 42 per cent in com- 



18 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



mercial timber tracts, in many cases already culled of their 
flioicest trees. A very large part of the once heavily timbered 
land, about 20,000,000 acres, is now fire-swept and devastated 
sand plain and swamp, much of it with little or no promise of 
reproduction. 

The original white pine stand of the Lake States has been 
estimated by Dr. B. E. Fernow at not less than 350,000,000,000 
l)oard feet. After less than a century of lumbering, fire, and 
.settlement, only about 8,000,000,000 feet of white and Norway 
l)ine remain, largely in Minnesota, in 1018 the reported cut 
of white pine in the Lake States exceeded a billion feet. An- 
other decade will see the practical exhaustion of their com- 
mercial supplies of white pine. 

f.oirer Fcniiisiila of Michigan. — The depletion of commercial 
timber has proceeded furthest in the Lower Peninsula of Michi- 
gan, where less than a million (probably not much over half a 
million) acres of hardwoods and hemlock remain. The hun- 
dreds of large sawmills that once operated had fallen off in 
1918 to about 45 that cut more than 1,000,000 board feet 
apiece. The number is rapidly becoming smaller, and within 
live years there will hardly be u half dozen large mills left. 
The exhau.stion of the remaluiug old-growth stands will mark 
the end, among other valuable species, of the highly prized 
•'Lower Michigan hard maple," long reputed to be the best 
in the Lake States. Prom then, on whatever lumber is cut will 
come mainly from farm woodlots, in small amounts and sizes, 
and of poorer grade. 

Wisconsin and the Ujipcr I'eninsula of Michinan.—ln the 
adjacent forest areas of Wisconsin and the Upper Peninsula 
of Michigan the case is better. lu 1908 the Bureau of Corpo- 
rations estimated the timberland at about 10,320,000 acres, 
with a stand of 65 billion feet. During the last 12 years 
probably 30 billion board feet in lumber has been removed. 
This would leave only 35 billion, enough at the present rate 
of cutting to last 15 years. There can be no doubt, however, 
that there is nnich more timber tlian this. The 1908 esti- 
mates were too conservative. There is reason to believe that 
the timberland still amounts to 4 million acres in upper Michi- 
gan and 2 million in Wisconsin, and that the total merchant- 
able stand is at least 48 billion feet. This would insure a con- 
tinued supply, at the present rate of cut, for about 20 years. 
This rate will not, of course, continue, but will decrease as 
successive mills saw out. The rate of cut Is considerably 
heavier In Wisconsin than In the Upper Peninsula. The larger 
number of Wisconsin mills and the considerably smaller stand 
of timber Indicate a much quicker falling olf in the cut and 
an earlier termination of the supply there than in upper 
Michigan. 

In Wisconsin, assuming a diminishing rate of depletion, the 
annual lumber cut will be likely to fall off within 10 years to 
75 per cent, in 15 years to 40 per cent, and in 20 years to 16 
per cent of the present cut, and In 25 years the timber will be 
practically gone. Cutting for other purposes than lumber will 
add appreciably to the amount of timber taken out. Further- 
more the pressure of an increasing demand, l)y stinnjlating 
the rate of cut both at the big mills and at numerous smaller 
mills, which will probably operate, as at present, in small 
patches of timber, will very likely hasten the final exhaustion 
of the timber. All things considered, It is doubtful if there 
will be any appreciable amount of timber left in commercial 
holdings iu Wisconsin at the end of 20 years. Growth does 
not enter into the computation at all, unless a radical change 
is made in the direction of ctiicient fire protection and the 
application of forestry. 

In upper Michigan the stand will last considerably longer. 
Here 60 per cent as many mills operate in twice the timber — 
enough, in fact, to last 40 years at the present rate of cutting 
for lumber only. Some new operations are already contem- 



plated, however, and the cut for lumber and other products 
will doubtless increase within the next few years. One prin- 
cipal holder is reported to have estimated the life of the stand 
at 25 or 30 years. 

Minnesota. — Timber conditions in Minnesota diff'^r widely 
fiom those in Wisconsin and Michigan. The Wisconsin lumber 
cut for 1918 was 85 per cent hardwoods and hemlock, while that 
of Minnesota vi-as 91 per cent white pine (which includes also a 
considerable amount of Norway pine and other species in the 
lower grades). Less than 5 per cent of the reported cut was of 
hardwoods. 

The timljered area of Minnesota was estimated by the Bureau 
of Corporations in 1908 at about 5,651,000 acres, and the stand 
at 23,200.000 000 board feet, 81 per cent of which was softwoods. 
A recent estimate by the Minnesota State forester places the 
softwood stand at 11,4.50,000,000 board feet, of which 41 per cent 
is white and Norway pine, 17.5 per cent jack pine, 24 per cent 
spruce, balsam, and cedar, and 17.5 per cent tamarack. The 
tamarack, which has been the greatest hewed-tle resource of 
the region, has practically all been killed by the larch sawfly, 
and must be salvaged soon if at all. 

The pine forests of Minnesota have been thoroughly culled 
of their best material, and production now runs heavily to box. 
lumber. 

The number of mills operating In this region is being re- 
duced rapidly. Within the last three or four years at least 
four of the large mills have burned, and these will probably 
not be replaced. Five have recently cut out, and two have 
only a year's supply. This means a decrease of 30 per cent 
in the total cut of the State and of 33 per cent in the cut 
of the big pine mills. The annual cut of the remaining mills 
will aggregate at least 600,000,000 feet. These mills depend for 
the great bulk of their cut upon white and Norway pine, the 
remaining supplies of which are estimated by the Minnesota 
State forester at 4,700,000,000 board feet. This will not last 
much more than seven years at the present rate of cutting. If 
the estimate of supply is increased by one-third, the period of 
operation would be 10 years at the present rate. As the mills 
exhaust their supplies, however, the rate of cutting will diminish. 

Condition of the remaining supplies. — The stands considered 
above are those which are being or could be logged on a large 
scale to large mills — mills of 10 million board feet or more 
annual capacity. Such mills now supply about 90 per cent 
of the lumber produced in the Lake States. Their holdings, 
even though culled, are almost wholly of old-growth timber of 
.superior quality as comparetl with second growth. 

These concentrated commercial stands, aggregating about 
63 billion board feet, contain about 57 per cent of the total 
stand of timber in the Lake States, which amounts to prob- 
ably 110 billion board feet. Of this total about 30 per cent 
(33J billion feet) is widely scattered in farm wood lots, while 
13 per cent (about 14^ billion feet) is in the swamps, jack 
pine and scrub hardwood plains, aspen and birch stands, and 
cut-over lands in the North. The timber in these stands is 
far below that of the commercial stands in quality. The 
greater part Is second growth. It Is smaller, more limby, and 
much of it has been badly damaged by fire. Furthermore, it 
is largely in small, scattered tracts unsuited for efficient large- 
scale operations. In addition, about 19 million acres bear a 
cordwood stand of about 113 million cords below saw-timber 
size. If the lumber stand al.so is reduced to cords, the total 
stand in the Lake States is 630 million cords, or 50,584 million 
cubic feet. 

THE ANNUAL DRAIN UPON THE FOREST. 

Lumber cut compared irith total ew/.— The normal lumber 
cut of about 3i billion board feet forms less than half of the 
total volume of wood cut annually in the Lake States for all 
purposes. The lumber cut Is the equivalent of about 770 



TIMBER DEPLETIO?:, PRICES, EXPORTS, AND OWNERSHIP. 



19 



iiiilliou cubic feet of standing tinihor. The total output ot 
wodil in all forms is close to l,CeO million cubic feet. The 
classes of output not covered in the lumber-cut statistics in- 
clude pulp wood, fuel, and distillate wood, hewed ties, posts 
and poles, and loss and bolts used for veneer and other pur- 
poses. Of these, pulp wood and distillate wood make up prob- 
ably 130 million and fuel wood 600 million cubic feet. The 
remaining 100 million cubic feet consists of veneer, cooperage, 
excelsior .stock, ties, jiosts, poles, and other products. 

Deterioration of the forest.— In addition to the cut there is 
a constant loss to standing timber from fire, wind, insects, dis- 
ease, etc., probably amounting to an annual average of from 
one-fourth to one-half of 1 per cent of the stand. This is 
equal to one-half billion board feet, or 110,000,000 cubic feet, 
of standing timber. It includes such losses as that of tam- 
arack, of which, as previously shown, about 2 billion board 
feet has been killed by the sawfly in Minnesota alone. There 
is also considerable loss from decay following injuries, such 
as frost cracks and ice breakage. In most of the commercial 
stands damage from these sources is not made up by growth, 
since these forests are generally much beyond the age of active 
growth. 

THE ANNUAL GROWTH. 

Gi-oioth compared tcifh cut. — The estiniatetl annual gi-owth in 
the Lake States is much less than the cut. 





Estimated 
annual cut. 


Estimated 1 '^"^i' 


I umber feet board measure 


3,500,000,000 

1 1,600,000,000 
20,000,000 


988,000,000 

1468,000,000 
5,850,000 


28 


All products including lumber: 




Cords 









These figures indicate that the total rate of cutting is more 
than three times the total rate of growth, and that the stand 
suitable for lumber is being cut more than three times as 
rapidly as it is growing. Furthermore, the larger part of the 
cut is from old-growth stands in the North, while nearly all the 
growth is in widely scattered second-growth stands. The cut 
is relatively concentrated, while the growth is widely distributed 
and without reference to the commercial advantages of loca- 
tion. This is a consideration of great significance for the future 
of the wood-using industries. The concentrated supplies are 
steadily waning. Their disappearance will mean the death of 
industries unable to adapt their production to a supply limited 
by the rate of growth or to import. 

Fire renders millions of acres of cut-over forest land in the 
Lake States unproductive. If fires could be kept out, the 
growth on these repeatedly burned lands would probably even- 
tually increase 50 per cent, and could be increased still further 
by intensive management. 

The life of the industry. — At a diminishing rate of depletion 
due to the cutting out of one holding after another, it is es- 
timated that the lumber cut of the Lake States at the end of 
the next 5 and 10 years will be about as follows : 

Estimated cut, 1925 2,400,000,000 

Present annual cut 3,500,000,000 

Estimated cut, 1930 1,800,000,000 

This represents only the production from commercial tracts. 
As the commercial stands dwindle the production of lumber and 
other products from farm wood lots and from second growth in 
swamps and cut-over areas may be expected to increase con- 
siderably in proportion to the total cut, though not in actual 
amount. Such lumber will be much inferior in quality to that 
froni the commercial stands. 



The average annual per capita consumption of lumber in the 
Lake States is probably not far from the average for the whole 
country— 300 board feet. Assuming a 12 per cent increase in 
population since 1910 (the increase for the previous decade was 
at the rate of 14.06 per cent), the present population of the 
Lake States is about 8,000,000. The total annual consumption 
of lumber in the three States is thus about 2,420,000,000 board 
feet, or 70 per cent of the lumber produced. 

Comparison with the estimates of future cut above given 
indicates that by 1925 tlie local consumption will be equal to 
the local production, assuming no increase in population and 
the same per capita rate of consumption. At the end of a 
decade, allowing for a 10 per cent increase in population, con- 
sumption will exceed cut by nearly 50 per cent. In other 
words, the per capita consumption must either fall from 300 to 
nearly 200 board feet per year or the Lake States must import 
nearly one-third of the lumber needed for home use. With each 
succ<;eding year the discrepancy between consumption and local 
supply will become greater. Much western fir and pine lumber 
is already being consumed in the Lake States, and as the local 
cut decreases they will depend more and more upon the far West. 
While an actual lumber shortage may not, therefore, be antici- 
pated as long as the western stands hold out, the lack of a 
local supply will be felt in increase<l prices. 

THE SOUTHERN YELLOW-PINE REGION. 

THE GROWTH AND DECLINE OF THE YELLOW-PINE INDUSTRY. 

The pine forests of the Southeastern United States, begin- 
ning along the Atlantic coast, have been exploited for naval 
stores and other forest products from the time of the first 
settlements. No extensive development of the lumber industry, 
however, took place until the seventies of the last century. 
Before the Civil War a limited amount of southern pine 
lumber was shipped to Baltimore and Philadelphia in schoon- 
ers by sawmills on the eastern shore of Maryland and near 
tidewater in Virginia. After the Civil War the industry 
spread to Georgia, Mississippi, and the other Gulf States. 
The markets north of the Ohio River made their first demands 
for southern pine about 1875. By that time the Northeastern 
States had lost their leadership in lumber production, and the 
Lake States were coming to the front with about 35 per cent 
of the country's cut. The great development of the southern 
pine industry began in the early nineties. About 1892 yellow 
pine from the Gulf States and Arkansas began to crowd white 
pine in the markets north of the Ohio River. Vast quantities 
were used in the construction of the World's Fair buildings in 
Chicago. An extensive demand was created by the low prices 
in the early nineties. This demand spread into the Lake 
States, the Prairie States, and the Eastern States. At the end 
of tlie nineties southern yellow pine was leading the country 
in the cut of softwoods. In 1909 its production reached the 
peak, with nearly half of the entire country's cut of softwoods, 
and from then on began to decline. 

Southern yellow pine is still the most important single factor 
in the lumber production of the United States, furnishing 
about 41 per cent of the cut of softwood lumber and 3o per cent 
of the entire lumber cut. It will remain an important factor 
for at least the next 10 or 15 years. Within the next 8 or 10 
years, however, it is certain to undergo profoimd changes. 
THE ORIGINAL AND THE PRESENT PINE FORESTS OF THE SOUTH. 

The original pine forests of the South Atlantic and Gulf 
Slates covered from 125 to 130 million acres and had a stand 
of timber close to C50 biUion feet. Of this about two-thirds 
was longleaf pine and one-third shortleaf pine.' 

^ Under "longleaf pine" are included longleaf and slash pines; 
under " shortleaf pine " are included shortleaf, loblolly, scrub, and 
other short-needled pines. 



20 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



To-day the areu of virgin yellow-pine forests is about 23* 
million acres, or a little less than one-fifth of the original 
acreage. (Sec Table 1.) The stand of virgin timber is abom 
1?.',) billioM Ixiard feet, or a lilllc over <me-tifth of the original 
stand. 

Tahi.e 1. — SoiiDicrn yellow-pine reijion — Clasnificulion of pine 
land by character of growth. 





Total net 
liine area. 


.\rea old 
grOHth. 


Cut-over lauds. 


state. 


Restocking 
saw timber. 


Restocking 
cordwood. 


Not 
restocking. 


North Carolina'.;."!!! 

South Carolina 

Oooreia . ... 


Acres. 
4,000,000 

15,500,000 

r2, 000, 000 

11,740,000 
9,500,000 
7424;00O 
2,000,000 
320,000 


Acres. 

■■■■m>:m 

600,000 
700,000 
11,000,000 
1,500,000 
3,000,000 
2,510,000 

500,000 
30,000 


Acres. 
1,600,000 

3 600 000 
2,500,000 
3,800,000 

'7oo;ooo 

3,500,000 
5,000,000 

4 500 000 

1,700,000 
560,000 
110,000 


A crcs. 
2,200,000 
5400;000 
3,000,000 
6,000,000 
1 000 000 
41000 000 
1,000,000 
1,200,000 

550,000 
80,000 


Acres. 

300,000 
1,200,000 
1,900,000 
5,000,000 




.■i 300 000 




oisooioofl 




3,000,000 
3,630,000 

..^:'% 

450,000 
100 000 




Arkansas 

Tox;is 


Missouri 






Total 


114.684,000 


23,490,000 


29,410,000 


30,930,500 


30,853,500 



Four-tlftbs of the original yellow-pine forests has been cut 
siiM-c 1870. 

Out of the more than 100 million acres of yellow-pine laud 
thr.t has been cut over about 29 million acres now supports 
second growth of merchantable sizes and nearly 31 million 
acres cut over recently second growth not merchantable. About 
31 million acres of cut-over land has not come back to pine, 
alihough much of it is more suitable for timber growth than 
for agriculture. As the nonrestocking areas do not produce 
any new growth and growth in virgin timber is offset by de- 
terioration, the total area on which yellow pine is now grow- 
ing is about 60 million acres. 

The largest areas of old timber are chiefly in the Gulf States — 
Texas, Louisiana, Mississippi, Alabama, and Florida. Areas 
of second growth are most extensive in the oldi^r South Atlantic 
States — Virginia, North Carolina, South Carolina, and Georgia. 

Total merchantable stand. — The total stand of merchantable 
yellow pine, both virgin and second growth, has recently been 
estimated at about 258 billion feet, of which 139 billion, or 
54 per cent, is old timber, and 119 tiilliou feet, or 46 per cent, 
is second growth. 



stand is 



North Carolina- 
Oklahoma 

Missouri 



ibnted 



M feet. 

15, 300, 800 

S, 698, 000 

4, 791, 400 

364, 700 



By States the nirrchantaliL 
follows : 

M feet. 

Louisiana 47,348.400 

Mississippi 40,476,200 

Florida 36,429,300 

Texas 27, 524, 700 

Alabama 25, .'iKi. 400 

Georgia 21,807,600 Total (Inm- 

Arkansas 1.5.743,700 ber scale )_ 257.691.000 

South Carolina-.- 13,889.800 

The present stand is about equally divided between longleaf 
and shortleaf pine, with probably a slight preponderance of 
shortleaf pine over longleaf, the shortleaf pine being more 
abundant in the South Atlantic States and the longleaf in the 
Oulf States. 

ANNUAL DRAIN UPON THE FORESTS. 

The cut of yellow-pine lumber in 1918— an abnormally low 
year— was in the neighborhood of 10 billion feet. Lumbermen 
estimate a cut for 1919 in excess of 15 billion feet. The aver- 
age cut for the five-year period before the war, 1911-1915. was 
about 141 billion feet, to which must be added at least lA bil- 
lion feet of hewn ties, poles, and posts, in all a cut of about 



16 billion feet of saw timber. There is also being cut in the 
pine area of the South about 12,2.50,000 cords of fuel wood. 

In addition to the cut there is every year a considerable loss 
of mature saw timber due to windfall, turpentining, insects, 
lires. and diseases. This loss may be conservatively placed at 
from one-fourth to one-half of 1 per cent of the entire merchant- 
able stand, or at present from 650,000,000 to 1,300,000,000 board 
feet per year. In all. the annual drain upon the forests is 
nearly 4* billion cubic feet of wood. 

THE ANNUAL GROWTH. ' 

The annual growth is estimated at about 3 billion feet board 
measur(> on the merchantable second-growth areas and 1 billion 
cubic feet " on the area of unmerchantable second growth, or 
in all in the neighborhood of 1,660 million cubic feet" a year, 
or nearly 30 cubic feet per acre for the entir(> growing area. 
(See Table 2.) 

Table 2.— Southern yellow-pine rcgiwv— Annual groicth of saw 
timber and cordwood hv States. 





b. m. 


Cordwood. 


state. 


M cubic 
leet. 


Cords. 




225,000 
360,000 
250,000 
380,000 

52,600 
350,000 
500,000 
450,000 
200,000 
170,000 

37,500 
8,000 


88.000 
162,000 
120,000 
240,000 

30,000 
160,000 

40 000 




North Carolina 


1,800.000 




1 333,000 










AlnhnTTiii 


1,778,000 


Mississippi 


444 mo 










Texas 


35,000 
11,000 


389,000 


Oklahoma 


122 000 


Missouri 








Total 


2,983,000 


1,100,600 


12,228,000 







CUT AND GROWTH CONTRASTED. 

The amount of yellow pine that is cut is thus about three 
times the annual growth. In saw timber the disparity is even 
greater. The annual growth upon the areas of merchantable 
timber is in the neighborhood of 3 billion feet, while the cut of 
saw timber is 10 billion feet. In other words, the present cut 
of saw timber is more than five times the present annual pro- 
duction. 

If the present merchantable second growth were not cut into 
for the next 10 or 15 years, but were allowed to grow at its 
present rate, and the unmerchantable second growth were 
allowed to reach merchantable size without being prematurely 
turpentined, the annual growth of saw timber would be con- 
siderably increased. This merchantable second growth, how- 
ever, is now also being cut and its area decreased at a rate of 
not le.ss than li million acres a year. About a quarter of the 
present yellow pine cut comes from second growth. Within the 
next 20 or 25 years the entire area of the present merchantable 
second growth may be completely cut over, and larpje areas will 
not come back to pine unless there is a derided "hange in the 
present procedure in regard to protecting the cut-over land 
from fire and hogs. 

DETERIORATION OF THE FOREST. 

It is doubtful if the South will ever again grow timber to 
the sizes wliiih we find in the virgin stands. The second 
growth now cut for .saw timber is inferior in quality to the 
old stands. \\'hile trees in the virgin longleaf-piue stands yield 
on an average from three to four logs which run six or seven 
logs to a thousand feet, trees in the second-growth stands 

' Equivalent to about 2 billion board feet. 
'" Equivalent to about 5 billion board feet. 



TIMBER DEPLETIOlSf, PRICES, EXPORTS, AND OWNERSHIP. 



21 



average at most two or two and a. half logs per tree, and the 
logs run fifteen to the thousand. The amount of upper grades 
that is sawed from second gi'owth is much smaller than from 
virgin timber. For instance, a mill tall.v on a certain operation 
sliowed that virgin timber sawed out on the average about 55 
per cent of the high grades, while second growth barely yielded 
19 per cent. An inferior forest is therefore succ(>eding the virgin 
timber and the highest grades are not being replaced at all. 

Change to inferior species. — Deterioration is taking place not 
only in grades but also in species. The most valuable timber 
trees of tlie soutliern pines are longleaf and slash pines, both for 
their timber qualities and as a source of naval stores. The 
longleaf pine, particularly throughout the Gulf States, as a rule 
does not come in on cut-over land, because of sparse seed pro- 
duction and the grazing of hogs. Unless cut-over longleaf-pine 
land is protected by hog-proof fences or by stock laws the areas 
of longleaf pine will be greatly diminished. The original pro- 
portion of longleaf in the soutliern pine forests has already 
been reduced for the remaining merchantable timber from two- 
tliirds to a little less than half. North Carolina, which once 
had large areas of longleaf pine and was famous as the " Long- 
leaf Pine State," can boast now of hardly 50,000 acres of 
second-growth longleaf pine widely scattered in small areas. 
A large part of the remaining virgin longleaf area will, after 
logging, either become nonproductive or be restocked to a con- 
siderable extent witli shortleaf pine. 

/ THE LESSON OF THE SOUTH ATLANTIC STATES. 

l-arge areas of second growth now found in the older .South 
Atlantic States and a fairly permanent cut of timber by small 
mills are often taken to indicate what the future of the Gulf 
States is to be after the larger sawmills liave completed their 
logging operations. There are vital differences, however, in 
the handling of the timber in the two regions. The virgin for- 
ests in the South Atlantic States were cut over very lightly- 
often for local consumption only — and the logging was done by 
animals. This left many young trees which soon formed a new 
merchantable stand and provided ample seed for young growth. 
The present-day steam logging in the Gulf States amounts to 
clear cutting over large areas, and even inferior trees are fre- 
quently brought to the mill. 

The virgin forests of the South Atlantic States contained 
les-s longleaf pine than the Gulf States. In Virginia, for in- 
stance, there was practically none. In the Gulf States long- 
leaf forms the bulk of tlie stand, and it is the longleaf repro- 
duction which is most affected by tbe free ranging of hogs. 
Furthermore, the turpentine operators are now tapping more 
and more young trees, and by excessive turpentining prevent 
many from reaching maturity. 

It is certain, therefore, that under present practice the Gulf 
States will not have as much second growth after the virgin 
forests are cut out as the older South Atlantic States now have. 

LIFE OF THE YELLOW PINE INDUSTRY. 

A recent survey covering 5,400 mills, owning or controlling 
practically the entire remaining virgin stand in the South, indi- 
cates that 4,419 mills, or nearly 82 per cent of all tho.se re- 
ported, will cut out in 5 years or less, and the output of virgin 
timber will be reduced by nearly 50 per cent ; that 5,254 mills, 
or over 97 per cent, will cut out their timber in 10 years or less, 
with a corresponding reduction in the output of 78 per cent; 
that in 20 years all the mills, except 12, will have cut out their 
timber, and their production will have been reduced to only 3 
per cent of the present output. This does not mean, however, 
that the total lumber production will be reduced at this rate. 
As the larger sawmills cut out small mills will take their place 
and will work in the second growth and on the small scattered 
tracts which under present conditions can not be economically 
logged in large-scale operations. 



Althougli in five years over 19 per cent of the present virgin 
timber will bo cut out, only about 11 per cent of the entire 
merchantable stand will be used up. In 10 years 52 per cent 
of the entire virgin timber will be gone, but only 30 per cent 
of the entire present merchantable timber. In 20 years nearly 
90 per cent of all the virgin timber will be exhausted and over 
50 per cent of the entire merchantable timber. As the virgin 
timber dwindles, the second growth will contribute more and 
more to the production of yellow-pine lumber. In 10 or 12 
years second growth will probably contribute two-thirds of the 
entire cut. 

Although the exhaustion of the virgin timber does not mean 
entire exhaustion of the yellow-pine industry in the South, tlie 
life of the industry as now constituted is largely the life of the 
present large savi'miils. When the larger mills cut out at the 
present locations, they will cease to figure in the industry ; for 
it is now almcst impossible for an operation of any magnitude 
to secure a location which commands enough timber to justify 
logging operations. The South will undoubtedly continue, as 
Xew England, to be a lumber-producing region. It will cease, 
however, to be a national factor; and from a general utility 
wood, the high-grade yellow pine, as the white pine, will be- 
come a specialty wood, while the second growth will furnish 
inferior grades for industrial purposes and for local use. In 
about 10 years the yellow-pine region promises to take second 
place as a national lumber-producing center. 

REDUCTION OF THE OUTPUT. 
Lumber production of yellow pine in 1980, allowing for new 
sawmills to take the place of the larger sawmills which will 
be cut out, it is estimated will be about 9i billion feet, a re- 
duction of nearly 6 billion feet, or 38 per cent, from the esti- 
mated production of 1919. This means a yearly decrease in the 
output of about .5.50 million feet, or a little over 3J per cent. 
If, however, to the sawed lumber is added the yearly cut of saw- 
log material for hewn ties, poles, and posts, and the loss of 
merchantable timber from windfall, turpentining, fires, insects, 
and diseases, the reduction is likely to be at the average rate 
of 700 million feet, instead of 550 million feet. This does not 
mean that every year the output will be actually diminished 
l)y 700 million feet. If the present high prices for yellow-pine 
lumber continue, production may be stimulated and the output 
may hold up during the next few years instead of declining. 
Sliould, however, such an increased production take place, the 
decline in the output will be so much the more rapid toward 
the end of the life of the industry. 



Tlie Southern States cousunre locally about one-thiril of their 
total pine cut, or 5 billion feet. By some good authorities home 
consumption is placed even at 50 per cent. 

Tlie South has passed the threshold of a great agricultural 
and industrial development. At tlie same time the South is 
underbuilt. The average value of its buildings per farm is less 
than in any other section of the country. With agricultural 
and industrial development the standards of rural and urban 
life will become higher; and better and larger houses will be 
built. This will require more lumber. 

Tlie annual consumption of lumber is expected therefore to 
increase until in 10 to 12 years it may amount to 9 billion feet. 
I5y that time the output of yellow pine will probably shrink to 
9 billion feet. Thus by 1930 the South may cease to be an ex- 
porting region, and may produce barely enough lumber for its 
own needs. This does not mean that no southern yellow-pine 
lumber will be shipped out of the Southern States, but it does 
mean that the exports and imports of lumber will balance. After 
1931 the South will become more and more an importing region. 
In 15 years the South will becomx; dependent for its own needs 
upon large importations of lumber from the Pacific coast. 



22 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



CYPRESS REGIONS. 

Cypress lias proljably passed its maximum production, and 
but a sliort time remains during which it can occupy a place of 
importance in the lumber industry. 

The value of cypress for house building and fencing was early 
recognized by settlers in the South. Under the colonial rule of 
the Spanish and French traffic in shingles and cypress lumber 
with t!ie West Indies was of great importance. Great quanti- 
ties were used for the hogsheads and barrels of the sugar and 
molasses trade. After the opening of the southern pine forests, 
the general use of cypress as the principal material for house 
construction, except for shingles, fell off, and the recent de- 
mands from distant markets date from the falling off of the 
white pine supply of the North. 

Until recent years only the largest and best trees nearest to 
streams and shallow canals in which they could be floated were 
cut. Utilization was therefore very incomplete. With the in- 
troduction of the pull boat in the nineties and finally the expen- 
sive steam skidder systems, and a better understanding of the 
value of the wood, no stands remained inaccessible. 

The cypress cut reached 495 million board feet in 1900; by 
1909 it was 955 million ; and in 1913 it exceeded 1 billion feet. 
It has fallen off since, with a reported cut in 1918 of only 578 
million. Lumbering is followed by practically no second growth, 
so that with the completion of present operations the cypress 
industry ends. 

In 1909 the Bureau of Corporations estimated the total stand 
of cypress at 40 billion feet. The best available figures to-day 
place the total at 22,921 million feet, and the totals for Lou- 
isiana and Florida, which furnish the bulk of the cut, at ap- 
proximately 13,000 million. If the annual cut during the next 
few years be placed at approximately 700 million feet, with 
the additional large and unknown amount used annually in the 
rough for piling, poles, and the like, it is evident that without 
growth in the remaining stands and on cut-over lands the supply 
in sight in the present producing centers, Louisiana and Florida, 
can not last more than 15 years. A largely diminished yearly 
production will be experienced much sooner. Well-informed 
lumbermen place the duration of the important commercial cut 
at no longer than 10 years. 

THE ROCKY MOUNTAIN REGION. 

The Rocky Mountain region includes Montana, Iilaho, Wyo- 
ming, Colorado, Utah, Nevada, Arizona, New Mexico, and 
western South Dakota." It is a region with wide differences in 
character and density of timber growth, in production and con- 
sumption of lumber, and in the probable future development and 
life of the lumber industry. Thus western Montana and Idaho, 
because of the lieavy stands of white pine, larch, and yellow 
pine, might properly be considered part of the Pacific coast 
region ; while Utah and Nevada, with their open forests, have 
entirely different economic problems to meet as far as the 
timber supply is concerned. Similarly, Arizona and New 
Mexico are practically an economic unit by themselves; Colo- 
rado and Wyoming form another economic unit, and South 
Dakota still another. Therefore in considering the present 
timber situation and the future o\itlook for the mountain 
region as a whole, the different sections of the region should 
be kept in mind. 

DEVELOPMENT OF THE LUMBER INDUSTRY. 

The development of the lumber industry liegan in the early 
fifties, chiefly to supply the mines. Even now mining is the 
heaviest consumer of wood in several sections. After 1900 the 



" That part of the Kanlksu National Forest in W.ishington is in- 
cluded in the Rocky Mountain rcylon, while those parts of the Eldorado, 
Inyo, Mono, and Tahoe National Forests in Nevada are included in the 
VaciUc coast region. 



lumber industry assumed more than a local character and began 
to ship lumber to the Mississippi Valley and eastern markets. 
The region is still short of the development which it will reach 
in lumber manufacture. It lias shown a steady increase for the 
last 20 years, and the present cut amounts to about 5 per cent 
of the entire production of lumber in the country. 

Western Montana and Idaho, because of the heavy stand of 
western white pine, larch, cedar, and yellow pine, is the most 
important section from the standpoint of timber supplies. 
Within these two States is 75 per cent of the entire stand of 
the highly prized western white pine. Wyoming, with its dense 
and extensive stands of lodgepole pine, is an important source 
of material for railroad ties. Colorado, more than half of 
whose timber is Engelniann spruce and which has also extensive 
lodgepole pine stands, is an important tie and lumber-producing 
center for the central Rockies. Western South Dakota, with 
its valuable yellow pine stands, is the center of lumber produc- 
tion for the State and the adjoining treeless region. Northern 
Arizona and New Mexico, with large open yellow pine forests, 
supply much of the lumber used in the Southwest and ship 
some to the North and East. 

ORIGINAL AND PRESENT STAND. 

The original forest area of about 64 million acres has now 
been reduced by about 3 million acres. This reduction is chiefly 
in Montana and Idaho, where much of the early logging was 
on agricultural lands. The present stand of saw timber is 
about 223 billion feet, or 10 per cent of the entire stand in 
the countrj. Practically all of it is softwoods. The stand is 
very unevenly distributed. Nearly 60 per cent, or 130 billion 
feet, is in Montana and Idaho; 18 per cent, or 39 billion feet, 
is in Arizona and New Mexico; 11 per cent, or over 25 billion 
feet, is in Colorado ; and the remainder is distributed in smaller 
quantities among the other States of the region. 

THE ANNUAL DRAIN UPON THE FOREST. 

The annual cut of saw timber is about li billion board feet, 
besides at least half a billion feet for ties, posts, poles, and 
fuel wood, making the total annual cut about 2 billion feet. 
This, also. Is unevenly distributed. Montana and Idaho to- 
gether have an annual lumber cut of over 1 billion feet ; Colo- 
rado, Wyoming, and South Dakota together produce not over 
150 million feet; and some 170 million feet is cut in Arizona 
and New Mexico. Besides the cut there is a loss of saw timber 
through fire, insects, and disease. In Idaho and Montana, 
where tires are most destructive, the annual loss from fire has 
recently averaged about 1,100 million board feet. The annual 
loss due to insects and diseases in these two States is estimated 
at about 100 million feet. For the entire region the loss from 
fire, insects, and disea.se is at least li billion feet. The total 
annual drain upon the forests is about 3i billion feet, two- 
thirds of which falls upon Montana and Idaho. 

ANNUAL GROWTH. 

The annual ;;rowth in the Rocky Mountains is estimated at 
401 million board feet of saw timber and 204 million cubic feet 
in the form of immature stands (equivalent to about 528 million 
board feet), which makes a total of nearly 365 million cubic 
leet (equivalent to about 989 million board feet), or 21.5 cubic 
feet per acre per year on the growing area. Most of the growth 
is in Montana and Idaho. 

CUT COMPARED WITH GROWTH. 

Considering saw timber alone, the annual drain is about 
seven times the growth. If we compare the cut of all forest 
products with the entire growth in cubic feet, the cut and 
devastation is two and one-half times the growth. 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



23 



LOCAL NEEDS. 

In Montana and Idaho tlie present cut of saw timber is in 
excess of tlie local needs, which are about S50 million board 
feet. Arizona and >few Mexico are not self-sustaining. In 
1914 about 350 million board feet of timber was used and only 
132 million feet was produced. Wyoming, although it produces 
more than 600,000 railroad ties and a large number of poles, 
posts, props, and mine ties, manufactures only about 15 million 
feet of lumber, less than enougli for its population. Colorado, 
although it produces 550,000 railroad ties and large quantities 
of posts, poles, props, and mine ties, manufactures less than 
100 million feet of lumber, and is not self-sustaining. 

THE FUTURE OF THE LUMBER INDUSTRY. 

Of the Rocky Mountain States, only western Montana and 
Idaho now produce lumber above their needs and can increase 
their output In the near future. It would seem that the forests 
of Montana and Idaho, with some 130 billion feet of saw timber 
and a present cut of only 1 billion ; Colorado, with over 25 billion 
feet and a cut of 100 million; Arizona and New Mexico, with 
39 billion feet and a cut of only 132 million, are capable of sus- 
taining a larger lumber industry for a considerable time. 

It should be remembered, however, that the region is still 
underdeveloped and that its requirements for lumber may also 
be expected to increase with its rapidly growing population. 
Furthermore, within the next 12 years over 95 per cent of the 
existing sawmills in the southern yellow-pine region will cut 
out. The Pacific -coast and western Montana and Idaho will 
have to assume the main burden of supplying saw timber to the 
entire country. This means more rapid cutting of the remain- 
ing stands and a big increase in the existing deficit in annual 
growth. A large amount of the standing timber is relatively 
inaccessible. The future supplies of accessible timber are 
therefore much more limited than is indicated by the estimates 
of the total standing timber. The privately owned timber in 
the territory tributary to Spokane will be cut out in 25 or 30 
years if the present rate of cutting continues ; and the cut, 
which now amounts to approximately 550 million feet of logs, 
will drop to 100 or 125 million feet, which the local National 
Forests can produce annually on a continuous basis. The lum- 
ber industry will then move to other timbered regions, probably 
to the Clearwater territory, which is tributary to Lewiston, 
Idaho. Even if the rate of consumption should not increase 
above tlie present figure, it appears that the bulk of Idaho's 
privately owned timber, including 75 per cent of the remaining 
.vhite pine in the United States, will be gone in about 40 years. 

The western red cedar is now being cut extensively in Mon- 
tana and Idaho for poles, piling, posts, and shingles. The pres- 
ent average annual shipments of poles, piling, and posts from 
Montana and Idaho amount to 210,360 poles and piling and 
8.789,000 posts. The regions which are now being exploited 
will probably be exhausted within the next 20 years and opera- 
lions will be transferred to more remote areas. The present 
cedar lumber prices have diverted into lumber a large portion 
of the material ordinarily manufactured into posts and shin- 
gles. Continuation of this demand might easily exhaust the 
entire available supplies of post and pole material in 20 years. 

Tlie future of the lumber industry in western Montana and 
Idaho will not be unlike that of the Pacific Northwest. There 
is this difference, however, that the supplies in western Mon- 
tana and Idaho are much smallier than those in Washington 
and Oregon, and comprise three-fourths of the remaining sup- 
ply of one of the most valuable .softwood timber trees of the 
countri — western white pine. Now that the eastern white pine 
is practically exhausted, the demand upon the western species 
will tend to increase. Tl;e other States of the Rocky Jlountain 
group will not be important factors in the lurober production 
lor the general market. 



PACIFIC COAST. 

GROWTH OF THE LUMBER INDUSTRY. 

The development of the lumber industry on the Pacific coast, 
our last great coniferous timber reserve, has already progressed 
far. The first sawmill in the Northwest began operations on 
Puget Sound in 1845. Within a decade lumbering became, and 
still is, the chief industry in western Washington. The cut foi' 
a good many years was used locally or shipped into California 
or exported. Not very much timber was cut until after the 
completion of the Northern Pacific Railway in 1882, and then for 
a number of years only in special grades. Twelve years later 
lower freight rales were made on eastern lumber shipments and 
the pronounced development of the west coast industry began. 

Very little lumber was cut in California prior to the begin- 
ning of gold mining In 1849. Lumbering in the redwood belt 
began about 1860 and grew steadily. In 1899 Wiishington, 
Oregon, and California cut a little more than 2,900.000,000 
board feet. Production increased slowly until in 1918 the total 
was slightly 'in excess of 8,590,000,000 board feet. Washington 
became the leading State in lumber production in 1905 and has 
since held this place, except only in 1914, wlien it fell slightly 
below Louisiana. The present cut is about 4,500,000,000 boartl 
feet annually. Oregon at present is the third State, with a lum- 
ber cut for 1918 of a little more than 2,700,000,000 board feet. 
That for California has never exceeded 1,500.000,000 feet. 

In the 12 years between 1906 and 1918 the cut of the West 
Coast increased only about IJ billion feet, largely because of 
the inability of the product to displace southern pine in the 
eastern and middle western markets under the handicap of 
higher freight rates. Within the last year, however, shipments 
have increased and yellow-pine markets up to the very boun- 
daries of the producing territory have been invaded. 
ORIGINAL AND REMAINING FORESTS. 

The oonnnercial forest area of the Pacific Coast States* has 
been reduced to approximately 57,586,000 acres. A large per- 
centage of this, about 39,370,000 acres, is in virgin stands, not 
all, however, of accessible high-grade timber, for there is a 
large percentage of relatively inferior and inaccessible areas. 
This is an important factor which is usually overlooked in the 
consideration of the western timber supply. Second growth of 
saw-timber size covers about 5,292,000 acres and smaller second 
growth 6,425,000 acres, while nonrestocking areas cover 
6,500,000 acres. 

Of the volume of the original forest no satisfactory statis- 
tics are available. The present stand, however, is about 1,141,- 
031 million board feet, or practically half of the remaining 
saw timber in the United States. Oregon leads with a total 
stand of 493,700 million feet ; that of Washington is 334 billioii ; 
and that of California, 313,331 million. Six hundred and eighty- 
six billion, or more than half of the total, occurs in the Doug- 
las fir belt of western Oregon and Washington. 

Douglas fir comprises 558,571 million feet, and of this 505 
billion, or nearly one-fourth of the remaining stand of saw 
limber in the United States, is in Washington and Oregon. 
Estimates by species are as follows : 

Board feet, lumber 
scale. 

Douglas fir 5.5S, 571, 000, 000 

Western yellow pine and Jeflfrey pine 183, 4.j3, 000, 000 

Western hemlock (largely in western Wash- 
ington and Oregon) 94,000,000,000 

True firs 82,479,000,000 

Redwood (California) 72,208,000,000 

Sugar pine and western white pine (largely 

sugar pine in California) 38,485,000,000 

Western red cedar (western Washington and 

Oregon ) 49, 000, 000, 000 

Spruce (Washington and Oregon) 13,355,000,000 

Lodgepole pine 4, 5GC, 000, 000 

Others 44, 914, 000, 000 



Tot: 



1. 141, 031. 000. 000 



24 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



GROWTH AND DEPLETION. 

The total area cut over is approximately 0,125,000 acres, of 
which two-tliirds is in Washington and Oregon, and a very 
large percentage west of the Cascades in the Douglas fir belt. 
As already indicated, the total nonrestocking area of the Pacific 
Coast States is estimated at 6,500,000 acres, but this is only 
'a part of the sum total of depletion, since there has been great 
and needless loss from the destruction of virgin stands by fire 
and other causes on a part of the 6,425,000 acres now support- 
ing second growth. The area burned over annually in those 
three States is shown by Forest Service data to amount to 
450,000 acres, and the los.s in timber to about 600,000,000 board 
feet. 

The average annual cut, largely lumber but including rela- 
tively small amounts of other materials, is about 10 billion board 
feet. To this it is probably safe to add IJ billion feet lost by 
fire and other causes. It is also probably safe to assume that 
11 billion feet out of the total represent the driiin upon saw 
timber. Annual growth is estimated at 1,262,000,000 board feet. 
There is in addition growth of approximately 430,000,000 cubic 
feet in stands of unmerchantable size. Total growth in cubic 
feet amounts to 706,000,000."^ One reason for these compara- 
tively low figures is, of course, the fact that so much of the 
territory is occupied by virgin stands. Total depletion in cubic 
feet amounts to 2,500,000,000. Depletion is therefore approxi- 
mately three and one-half times the growth. The depletion in 
timber of saw timber size is approximately nine times the 
growth of the same class of material. 

LIFE OF THE INDUSTRY. 

The timber stand in California is estimated at 313,331,000,000 
board feet. This is being reduced by cutting at the rate of 
about 1,500,000,000 feet annually. These figures should not be 
tal*en alone, however, for tliere are other important aspects of 
the situation. Increased demands from the East w-ill almost 
certainly result in an increased rate of cut for California. 
Practically all of the cut up to the present has been in the most 
acce.ssible stands, whereas a considerable part of the remain- 
ing timber is comparatively inaccessible. 

Logging operations are now removing annually a little less 
than 2 per cent of western Washington's timber and le.^s than 1 
per cent of western Oregon's timber. Yet the reasonably ac- 
cessible timber and that in private ownership is going very 
much faster, and with decreasing southern pine production 
( normous pressure to increase the cut may be expected. 

A study of the local timber supply indicates that in certain 
localities a large proportion has been cut off and that log- 
.cing operations ai-e being pushed back to the less accessible 
limber in the rougher mountainous regions. The exhaustion 
of local supplies is a vital matter to local prosperity and de- 
velopment. It means the cessation of a local industry, the 
abandonment of improvements, rapid depreciation of invest- 
ment, and other losses which the industry, the community, and 
the consumer must shoulder. One authority estimates that only 
a third of the original privately owned timber tributary to 
Puget Sound remains.. The situation in Grays Harbor County 
Illustrates the rapid exploitation which in a surprisingly short 
time is to end the industry locally. About 20 years ago there 
were in this county 750,000 acres of timber and only about 
75,000 acres of cuttings. Now there are 355,000 acres of stumps. 
One-sixteenth of the county's private timberland is being cut 
over annually. In 25 years the supply of privately owned virgin 
timber will be gone. 

King and Snohomish Counties, Wash., the scene of the earli- 
est lumbering operations in the Northwest, also illustrate local 
exhaustion of virgin timber in the not very remote future. 
Korty billion of the original SO billion feet of commercial timber 



to about I'.IOO, 000.0(10 board feet. 



has been cut. Thirty billion of the remainder is in private 
ownership, and is now being felled at the rate of 800,000,000 
feet anuually. Indications are that this private timber will be 
gone in about 35 years. 

One authority on the lumber supplies of Washington has 
studied the rate of exhau.stion from the annually decreasing 
acreages of private land assessed as " timberland." He found 
that from 1909 to 1919 there was a decrease in the acreage of 
timberland in western Washington of about 850,000 acres, or 
85,000 acres annually, and in eastern Washington of about 
390,000, or 39,000 acres annually. On the basis of 3,585,686 
acres assessed as timberland in 1919 in western Washington, 
privately owned old-growth timber would last 42 years at the 
present rate of cutting. Similarly, in eastern Washington, for 
the 1,128,666 acres of private timberland in 1919, the present 
rate of cutting would exhaust the virgin timber in 26 years. 
Adjusting these statistics to provide for additional land which 
was classified as timberland in 1919 but not in 1909, he believes 
that an even faster rate of cutting of the private stumpage is 
indicated, and that, disregarding increment in second-growth 
stands and without allowing for the expected increased cut, the 
private virgin timber will last only 35 years in western Wash- 
ington and 20 years in eastern Washington. Allowing for the 
almost certain increased rate of cutting, he expects the privately 
owned virgin timber supply of Washington to be virtually gone 
in 20 years unless forest policies are changed. 

Bend, Oreg., is the center of one of the most extensive and 
famous of Oregon's yellow-pine belts. A -few years ago an 
unbroken forest of virgin yellow pine extended to the very 
edges of the city. At present cutting has left a practically 
unbroken waste for 6 or 7 miles to the west and south. The 
operating territory surrounding Bend has a radius of from 
20 to 30 miles and occupies an area of 382,000 acres of mer- 
chantable forest, carrying 5J billion feet of commercial timber. 
Of this about 231,000 acres, carrying 3i billion feet, is pri- 
vately owned. The present rate of cutting, which is likely to 
continue and may be augmented, will exhaust the privately 
owned stumpage in 25 to 30 years. 

Depletion in Washington has gone much further than in 
Oregon, and while an expansion of the industry in Washington 
under increased demands from eastern markets may reason- 
ably be expected, by far the greater part of the expansion may 
be looked for in Oregon. The reason for the slower develop- 
ment in Oregon lies in the greater inaccessibility of its Douglas 
fir stands. Many operations how being seriously considered 
for Oregon will require transportation and other investments 
running into the millions of dollars before any timber can be 
taken out. 

The factor of local consumption nuist also be considered. 
California is an example. Its industry is large and promises 
to grow. From the earliest days California has been an im- 
portant source of export material. Large quantities are still 
exported to the East and to foreign countries ; but up to the 
present time the State's population and agricultural and indus- 
trial development have more than kept pace with the output 
of lumber, so that it is doubtful whether production has ex- 
ceeded consumption since about 1875. From the beginning of 
lumbering on Puget Sound California has imported large 
amounts of fir. The per capita lumber cut of the State has 
been approximately equal to or slightly in excess of the 
average per capita consumption of the United States since 
between 1869 and 1879, while the average consumption of the 
Stiite is probably somewhat greater than for the country as 
a whole. In 1919 southern California alone used the equivalent 
of about half the total cut of the State, a per capita con- 
sumption of at least twice that of the whole United States. 

The lumber cut for the Pacific Coast States as a whole will 
undoubtedly increase very materially during the next 10 years. 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



25 



Local demands will also increase, liut not in proportion to the 
cut. Large additional amounts will be available for the eastern 
markets. A gradual ri.se in logging costs Is inevitable as tte 
more accessible stand.s are cut out and it becomes more and 
more necessary to extend operations to tbe rougher mountainous 
logging cbances, with lighter and more broUen stands and 
larger percentages of the less de.sirable species. The timber 
resources of the Pacitio Coast States are very large, but it 
would be very unwise to overestimate them, for much less than 
the total stand is readily available. Existing transportation 
facilities to tbe East are already overburdened with present 
traffic, and they will have to be very materially increased to 
meet the probable reduction in the eastern and southern luuilier 
cut during the next 10 years. 

THE SOUTHERN APPALACHIAN HARDWOODS. 

GROWTH AND DECLINE OF LUMBERING. 

For the purpose of this report the southern Appalachian 
hardwood region includes the hardwood forests of Maryland, 
West . Virginia, Virginia, North Carolina, South Carolina, 
Georgia, Alabama, Kentucky, and Tennessee. 

Large-scale logging operations shifted to this territory from 
Pennsylvania, Ohio, and Indiana. Operations in West Vir- 
ginia on a large scale did not begin until after the Civil War. 
Before 1900 central Kentucky and Tennessee were well cut 
over. The cut for the entire region was at about the maximum 
in 1909, with an output in hardvpood lumber of approximately 
4 billion board feet. Following this there was a pronounced 
decline, and in 1918 the cut had decreased to 1,700,000,000 feet. 
While this heavy falling off in cut was. of course, very largely 
due to war conditions, there has been a decrease in proportion 
to the total hardwood cut of the country, for which the deple- 
tion of supplies appears primarily responsible. The proportion 
of the aggregate hardwood lumber production which was sup- 
plied by the Appalachian States had risen gradually from 32 
per cent in 1899 to 41 per cent in 1914, but by 1918 it had 
fallen to 34 per cent. West Virginia, which held the lead in 
hardwood production from 1910 to 1917, lost it to Arkansas in 
1918; while North Carolina, which cut approximately 400 
million feet in 1909, dropped to less than 200 million in 1918. 

The cut has declined in quality as well as quantity, and this 
is perliaps the more serious aspect. The early lumbering con- 
sisted of cullings in which only such trees as walnut, cherry, 
and the finest of oak and yellow poplar situated along the driv- 
able streams were removed. The introduction of logging 
railroads extended operations into nearly all parts of the re- 
gion, until now there is comparatively little virgin timber left, 
most of it remote and difficult to log. The present logging 
operations are largely working over previously-culled stands, 
removing practically every saw log and a large part of the 
smaller material. The quality of the lumber produced is con- 
sequently much poorer than formerly. • 

THE ORIGINAL FOREST. 

The virgin fore-sts which once covered practically the entire 
land area of this region contained a wealth of hardwood tim- 
ber unsurpa.ssed iu tbe Northern Hemisphere. Oalv, chestnut, 
and yellow poplar of large size and high quality filled the 
coves and valleys, mixed with walnut, cherry, hickory, bass- 
wood, cucumber, and other valuable hardwoods, ai d softwoods 
such as white pine and hemlock. Over an area exceeding 60 
million acres the original hardwood stand may be estimated at 
more than 325 billion feet. 

THE REMAINING STAND. 

Lumbering and settlement gradually restricted the area of 
commercial timber to the mountains. This part of the region, 
about 3a million acres, now contains practically all of the re- 
maining tracts of old-growth hardwood timber, and tlie extent 



of these has been reduced to about one-third of the total area, 
the remaining two-thirds being either in recently cut-over land, 
usually badly burned, or in farmers' woodlands. So far as can 
be learned from the available sources, the stand is in the 
neighborhood of SO billion hoard feet, of which 60 billion is 
old-growth timber occupying about 12 million acres. Most ol 
this has been culled of its best trees, and the virgin tract- 
which remain are few, relatively small, and remote, .\bout 12 
per cent of the stand is spruce, hemlock, and various pines. 
The oaks are the principal hardwoods and probably comprise 
about 35 per cent of the stand, while chestnut is the most 
abimdant single species and is estimated at 25 per cent. 

For all the States within which the southern Appalachian 
Mountains lie, the total stand of hardwoods is estimated at 
147 billion board feet, about ^>S per cent of the total stand of 
both .softwoods and hardwoods. Outside of the mountain re- 
gion the stand is practically all second growth in farm wood- 
lands. The total area bearing hardwood stands is about .55 mil- 
lion acres. 

LUMBER CUT AND TOTAL CUT. 

During the (wo years preceding our entrance into the war 
the annual hardwood lumber cut of the southern .\ppalachian 
States fell from about ?>i to about 2i billion board feet. In 
]918 there was a further reduction to less than 2 billion board 
feet. Under normal conditions it is likely that the cut of lum- 
ber would still be proceeding at close to 3 billion board feet per 
year. The lumber cut, however, is probably only about 35 per 
cent of the total drain upon the forests. An immense amount 
of material is taken out in the form of tanning-extract wood 
and bark, poles, ties, cooperage stock, fuel, and other products. 
Expressed in terms of cubic volume, the " normal " annual lum- 
ber cut is the equivalent of 657 niilli<m cubic feet of standing 
timber, while other products consume an additional 1,220 mil- 
lion cubic feet, making a total annual production of about 1.877 
million cubic feet. Much of this output is, of course, from 
second-growth timber. Of the lumber output, however, fully 75 
per cent is from the remaining old-growth stands. After the 
exhaustion of the old growth the entire supply of lumber must 
come from the second growth, and since very little of this will 
yield lumber of a better quality than No. 1 common, tbe effect 
upon the furniture and other industries largely dependent 
upon high-grade lumber will lie very .serious. 

DETERIORATION OF THE FOREST. 

The chestnut blight has entered the mountain region, and In 
the opinion of .pathologists is almost certain to sweep through 
the hardwood forests, eliminating chestnut. Besides depriving 
the tanning and other industries of one of their chief sources of 
supply, this disease will throw the burden of the lumber cut 
upon other species, thus hastening the process of depletion. It 
is impossible to forecast the rate of this depletion. 

A further loss which can not be measured satisfactorily in 
amount of material or money value is that from forest fires. 
Much of the mountain forest has been repeatedly burned, and 
while not much timber has been actually killed the fires are 
responsible for a great deal of deterioration in the timber. 
THE DURATION OF THE CUT OF OLD GROWTH. 

Much uncertainty exists in the minds of even the best-in- 
formed men in the lumber industry as to the duration of the 
cut in the remaining old-growth stands. In West Virginia, 
which has been one of the leading hardwood producing States, 
the statement was made by one of the best-informed men in the 
industry that the length of cut on a large scale would not ex- 
ceed five years. The manager of one large company reports 
that most of the mills of the State will cut out within five to 
eight years. A responsible official in another company states 
that very few concerns in his section of the State have over 



26 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



five .years" cut. In North Carolina the State forester estimates 
liat the supply of okl-growth hardwood timber will last 17 
years. One of the best-informed lumbermen in western North 
Carolina estimates that the cut from old-growth timber In 
north Georgia and southwestern North Carolina will last 20 
years, but that this cut will come increasingly from small 
operations. 

In Kentucky and Tennessee the duration of the cut of old- 
growth hardwoods is believed by the manager of one lumber 
company to be 20 years, while another well-informed man sees 
15 years ahead for the Kentucky hardwoods. A future cut of 
15 years is predicted for old-growth timber in the southern Ap- 
palachians by another representative of the industry, while still 
another estimates that the supply will last 25 years. 

The consensus of opinion among the best-informed men in 
the industry seems to be that if present conditions continue the 
southern Appalachians will have ceased to function as an 
important source of high-grade hardwood lumber within 20 
years and that within 25 years the old-growth timber will be 
practically gone. 

KFFECT OF DEPLETION UPON SELECTED INDUSTRIES. 

Further light is thrown on the extent of the depletion of the 
soutliern Appalachian old-growth hardwoods by a questionnaire 
to the wood-using industries of North Carolina by the State 
forester, lieferring to local supplies at the present time in 
comparison with conditions existing during the past 10 or 20 
years, 93 per cent of the furniture makers, 91 per cent of the 
vehicle makers, and 100 per cent of the chair makers reported 
that supplies had been greatly reduced. In referring to pros- 
pective local supplies on the basis of a 10-year outlook, 12 per 
cent of the furniture, 22 per cent of the vehicle, and 43 per cent 
of the chair factories reported that supplies would be ex- 
hausted. Eighty-eight per cent of the furniture, 67 per cent of 
the vehicle, and 57 per cent of the chair makers reported that 
supplies would be gradually reduced. Of all of these only 11 
pel- cent of the vehicle factories reported an outlook for suffi- 
cient material. 

The replies received from the furniture manufacturers indi- 
cate a marked decrease in the use of oak and poplar as com- 
pared with gum. In 1909 the lumber used was 74 per cent oak, 
13 per cent poplar, and 1 per cent gum, while in 1919 the per- 
centages of oak and poplar used had been reduced to 60 and 6 
per cent, respectively, while gum had increased to 21 per cent. 
The manufacturers indicate that the present year will see a 
still larger proportion of gum used. 

THE ANNUAL GROWTH. 

There are about 221 million acres of second-growth hardwoods 
of S!iw-tiuiber size in the southern Appalachian States, which 
are estimated to be producing about li billion board feet per 
year, equal to about 325 million cubic feet of standing timber. 
In addition there are approximately 22J million acres which are 
producing hardwood material of only cordwood size. The 
annual growth on this area is about 570 million cubic feet. The 
total growth is thus about 900 million cubic feet. 

GROWTH COMPARED WITH CUT. 

Growth is about one-half the " normal " rate of cut : 





annual cut 
("normal"). 


Estimated 
growth. 


Growth in 
of cut. 


t.umhor hnnrH fotf 


3,000,000,000 
'1,877,000,000 


1.490,400,000 
'895,000,000 




AU products, including lumber, cubic 


4S 







' In terms of lumber, this corresponds to an annual cut o( about 5,440,000 OOn 
>ard feet and an annual gro»-th of about 2,630,000,000 board feet. 



In contrasting these figures, however, it should be remem- 
bered that much the greater part of the cut is being taken 
from the relatively concentrated old-growth timber, while the 
growth is taking place in the widely distributed stands of 
second growth. The cut is from large timber yielding high- 
grade lumber ; the growth is nearly all low grade because of 
the small size of the trees. Great damage is constantly being 
done by forest fires, \\hile the second growth Itself is being 
drawn upon more and more for a wide variety of small wood 
products. 



The future production of the Appalachian hardwood region 
is of far more than purely local importance. The hardwood 
fore.sit lauds of Ohio, Indiana, and Illinois, which supplied 25 
per cent of the total hardwood lumber cut as late as 1899, 
have been converted into farms almost as fast as the land 
has been cleared, and small isolated tracts, as farm wood lots, 
will furnish the only future timber production. Hardwood 
lumber production is now centered in the lower Mississippi 
A'alley, and the cut is almost entirely from rich agricultural 
lands from which timber production can not be expected in 
the future. Farm woods will continue to contribute, but if 
there is to be any permanent supply of large-sized, high-grade, 
hardwood saw timber it must come very largely from moun- 
tainous, rough, or otherwise nonagrieultural lands like those 
in the southern mountains. Aside from relatively small areas 
in the Lake States and in New England, the entire country 
must look to the southern Appalachians. 

HARDWOODS OF THE LOWER MISSISSIPPI VALLEY. 
AREA AND STAND. 

The lower Mississippi Valley, Including the States of Arkan- 
sas, Mississippi, Louisiana, eastern Texas, and eastern Okla- 
homa, constitutes the last great reservoir of hardwoods in the 
country. Of the hardwood area of 36,000.000 acres in this 
region, 60 per cent, including the heaviest stands and most 
valuable species, is located on the alluvial bottoms of the Mis- 
sissippi Delta. Most of this is unusually fertile and will even- 
tually be cleared for agriculture. The remaining 40 per cent, of 
upland stands, is of less importance from a lumber standpoint, 
both because of the smaller trees and great mixture of 
species and because much of it is broken up by farms and pine 
stands. 

Altogether the region is estimated to contain nearly 133 
billion board feet of saw timber, or more than twice as much 
as the present stands of old-growth hardwoods in either the 
Lake States or the southern Appalachians. With the exhaus- 
tion of the hardwood supplies in these regions, the lower Mis- 
sissippi Vagey is being drawn on more and more heavily to 
furnish the raw material for the hardwood-using industries 
of the entire country. 

DEVELOPMENT OF THE LUMBER INDUSTRY. 

During the period from 1900 to 1906 the cut of hardwoods in 
Ohio, Indiana and Illinois, which had previously contributed 
large quantities to the vehicle, furniture, railroad-car, and other 
hardwood-vonsuming industries, fell off by nearly 50 per cent. 
By 1906 the center of hardwood production had shifted to 
the Appalachian States, which furnished nearly half of the 
country's hardwood consumption, while nearly one-fifth came 
from the Lake States. Now these regions in turn are declining 
in production, and there is a corresponding increase in the 
cut of the lower Mississippi Valley. The exploitation of hard- 
M'oods in this region has progressed steadily since 1900. its 
contribution to the total hardwood cut increasing from 14 per 
cent to approximately 25 per cent. To-day the hardwood 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



27 



products from this region are being used to supply the factories 
of the Carolinas, the Ohio Valley, and the Lake States, which 
were formerly independent of imported material. 

The last of the great hardwood regions is thus well on its way 
toward complete exploitation. Already .the exhaustion of the 
original supplies in the northern part of the region centering 
around Memphis has reached the point where it is profitable 
to return to cut-over areas for trees that were formerly re- 
garded as too small to log and for less valuable species, such as 
tupelo and water gum, which at the time of the first cutting were 
unmerchantable but which now command a ready sale. The 
present practice in this part of the region is to remove all species. 
Wood distillation plants have been installed for using cord- 
wood and there is a steadily inci easing interest in the utiliza- 
tion of smaller sizes, inferior trees and logs, and species 
formerly rejected. The day of the small mill and wood-prod- 
ucts plant has arrived. More and more the large mills are 
finding themselves forced either to buy logs in order to con- 
tinue operation or to move down river into southern Mississippi 
and Louisiana where new plants can be erected with reasonable 
prospect of a 20 to 25 years' supply of material. 

In the southern part of the territory, in southern Mississippi, 
Louisiana, and eastern Texas a much larger proportion of the 
origin.-il forest is left. Here large mills are still the rule and 
are increasing in number and in rate of exploitation. It Is 
therefore likely that increased production in this part of the 
region will lead to an increase of the present annual cut of ap- 
proximately a billion and a half board feet of hardwoods for 
the region as a whole. How long it will last can not, however, 
be definitely predicted. The one thing certain is that eventually 
the southern part of the region will repeat the history of the 
northern part and that the virgin stands and large mills of 
to-day will be replaced to a large extent by portable mills 
operating culled and second-growth stands. 

GROWTH AND DEPLETION. 

Since the region is largely agricultural in its future possi- 
bilities, comparatively little in the way of timber growth can 
be looked for. The extent to which it is drawing on its forest 
capital is of great importance, because it is the source of our 
largest remaining hardwood supply. A net growth is taking 
place on only some 6.5 million acres carrying hardwoods of saw- 
limber size. The annual growth on this area is estimated at 
approximately 395 million board feet, or but little more than 
one-fourth of the normal annual lumber cut of 1,.500 million 
board feet. In addition there is an annual growth of 301 
million cubic feet (about 602 million board feet) on the 15 
million acres with stands below saw-timber size, making a 
total growth for the region of 387 million cubic feet (about 
997 million board feet). 

In addition to the depletion in quantity of material there is 
a depreciation in the quality of the remaining stand. Of the 
36 million acres of hardwood lands in the region, approxi- 
mately 22 million acres are contained in the alluvial bottom 
lands of the Mississippi Delta. It is on the.se alluvial soils 
that the heaviest and finest stands of hardwoods remain, par- 
ticularly oak, red gum, ash, and Cottonwood, which in 1918 
made up more than 50 per cent of the reported cut of hard- 
woods for the entire country. Oak and red gum are now being 
logged most heavily and in 1918 made up more than two-thirds 
of the total hardwood cut in the region. These species, because 
of the demand for them in the veneer industry, are two of 
the most highly prized hardwoods of the South, but they are 
valuable for veneer only when cut from virgin stands and in 
large sizes. With the rapid depletion of the present virgin 
stands there will therefore be a corresponding quality short- 
age, which will result in a relatively larger proportion of the 
future cut being made up of such secondary spt>cies as syca- 



more and tupelo and of poorer specimens of the more valuable 
species, such as oak and gum. 

THE FUTURE OF THE REGION. 

This steady depletion of the hardwoods in the lower Missis- 
sippi Valley is accentuated hy the fact that the bulk of the 
l)r)ttoi" land stands are on some of the most fertile farm soils 
in th(j*\'ountry. With the removal of the timber they will, for 
the most part, be devoted to agriculture. Drainage and clearing 
of the cut-over lands has been going on for more than a decade 
at a rate which indicates that not over 10 per cent, .ind probably 
less, of the area once under hardwoods will be allowed to come 
up to second growth. This change in the use of the land, which 
is of course in accordance with its highest utilization, means 
that the cut in the bottom-land region of the lower Mississippi 
Valley can not be maintained from second growth to the same 
extent as has been the case in the Noitheastern and Central 
States. Once the present stand of timber on these bottom lands 
is gone, the hardwood supply of the country will be permanently 
redueetl, and the future cut of hardwoods nuist come from sec- 
ond-growth stands of relatively inferior (luality in other parts 
of the country. 

NEWSPRINT SUPPLIES. 

THE FACTS AS TO DEPLETION. 

Newsprint paper is one of the leading products of the pulp 
and paper industry, which in its modern development depends 
upon the forest for its raw material. The present newsprint 
shortage goes back fundamentally to our dependence for news- 
print production upon the forests of the Northeast and the Lake 
States, where timber supplies have already been seriously de- 
pleted, and where, considering the remaining stands, the pulp 
and paper industry is already seriously overdeveloped. 

Until the abnormal demands, short supplies, and resulting 
prices of the past few months led to increased newsprint pro- 
duction through the utilization of plants designed for and for- 
merly used in making other kinds of paper, there had been no 
expansion in the newsprint industry in the United States since 
1909. The demands for newsprint paper had. however, been 
increasing by leaps and bounds. In 1899 our consumption 
amounted to .569,000 tons. In 1918 it had reached 1,760000 tons, 
an increase of approximately 200 per cent. Per capita consump- 
tion of 3 pounds per person in the United States in 1880 had 
increased to 33 pounds per person in 1919. With an increase 
of 11 times in 40 years, rapidly increasing requirements between 
1909 and 1919, and very little increase in production, imports 
were obviously necessary. 

Before taking up the extent to which the United States is 
supplying its domestic requirements, the importance of the coun- 
try's being on an independent basis so far as newsprint pro- 
duction and the necessary raw materials are concerned should 
be briefly considered. Dependence upon foreign sources for 
)mlp wood or pulp newsprint exposes the .\merican consumer to 
the danger of price control. He must also reckon with the pos- 
sibility of embargo, which even now is far from being a theo- 
retical menace. All exports of pulp wood are prohibited from 
the colony of Newfoundland. The Canadian Provinces have pro- 
hibited the export of pulp wood from crown lands, which form 
a very considerable extent of the timborlands both in eastern 
and western Canada. For a year or more American manufac- 
turers have been apprehensive concerning the possibility of em- 
bargo on all pulp-wood exports from Canada. It would unques- 
tionably be desirable to make the United States as nearly self- 
supporting as possible. 

In lumber the United States is still an exporting country, 
but in pulp wood, pulp, and newsprint we have become large 
importers. From being self-supporting in newsprint production 
as late as 1909 the United Stales had, in 1919. 10 years later, 



28 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



Ixconie dependent upon foreign sources for approximately two- 
thirds of our newsprint or its raw material. 

The factors which have held our newsprint industry prac- 
tically at a standstill in the face of rapidly growing domestic 
i-equirements are pertinent in a study of timber depletion. Tlie 
various requirements of paper making have restricted the num- 
ber of species wliich have gone into newsprint paper, and inci- 
dentally into all kinds of pulp and paper, very largely to four, 
of which spruce supplied 55 per cent of the total pulp manu- 
factured in 1917, hemlock 16, balsam 7. and poplar 6, a total of 
84 per cent from four species. Tlie overcentrallzation of the 
industry in the Northeast and Lake States and the consequently 
serious overcutting of the timber in these regions is due in no 
small degree to tliis restricted use and the occurrence of tliese 
species chiefly in New England and the Lake States. 

The lumber industry has followed the timber, but a mucli 
smaller investment per unit of output is required in the lumber 
mill than in tlie pulp and paper plant. On a prewar basis an 
investment of approximately $1,500 per thousand board feet of 
daily product is required in lumber manufacture, whereas pulp 
and paper establishments require approximately $50,000 par 
thousand feet of daily consumption. I^arge investments Imve 
therefore tended to hold the pulp and paper industry in the 
regions in which it was first established, and timber has been 
hauled increasing distances to the mills. A rail and water 
transport exceeding 500 miles is now not uncommon. 

When overdevelopment of the American industry in the 
Northeast and the Lake States, as compared with timber sup- 
plies within our own borders, prevented further development, 
and when Canada began to take measures to withhold pulp wood 
for the upbuilding of a liome industry, new construction to meet 
growing demands shifted to the other side of the international 
boundary, where it was welcomed by the Canadian and tlie 
various provincial governments. Since 1909, the year which 
marked the suspension in American development, Canadian 
production has increased from 150,000 tons to 800,000 tons, or 
approximately 433 per cent. 

The depletion of supplies in the Lake States is clearly indi- 
cated in Uie rapidly increasing distances from which the pulp and 
paper mills find it necessary to secure their material. A repre- 
sentative of one of the purchasing companies which supplies 
a large number of the Wisconsin mills reports that in 1904 sup- 
plies were largely obtained within the State. Five years ago it 
liad become necessary to go far north into Minnesota, but it 
was rarely necessary to ship material from points more than 
50 miles north of Duluth. At the present time, however, a very 
material part of the supply is secured from the extreme north- 
ern part of the State. Spruce from Minnesota is now being 
hauled from 700 to 750 miles by railroad to the Wisconsin mills, 
and from Canada up to distances of 1,000 and 1,200 miles. The 
situation has become so critical that the Wisconsin mills are 
seriously considering the possibility of securing their raw mate- 
rials from the Rocky Mountain region of Montana. For hem- 
lock the paper industry must compete with the lumber industry 
for logs of saw timber size, and, unfortunately, from the stand- 
point of future supplies, the cut now includes a very consider- 
able amount of material obtained from trees under saw 
timber diameters. 

It is reported from New York, where nearly 50 per cent of our 
domestic newsprint production is now centered, that 60 per cent 
of the pulp and paper mills have absolutely no timber supplies 
of their own. For tliese mills there seems to be little ahead 
except closing in a comparatively few years. At least 60 per 
cent of the remaining spruce pulp wood in New York is in the 
State preserves, on which no cutting is allowed. 

In New Hampshire the coniferous pulp wood has been cut 
very heavily, and 10 or 12 years will probably see tlie end of 
the supply. Aside from the State preserve in New York, the 
bulk of the remaining coniferous pulp wood of the East is 



located in Maine. One of the best supplied pulp and paper 
companies in the State has holdings which at the present rate 
of cutting various estimates give a life of from 40 to 60 
years. Holdings of another large company are estimated at 
about 20 years ; of still anotlier at 15 or 16 years. There are 
about 15 mills which have no lands of their own and which 
will probably have difficulty in purchasing material within 10 
years. 

The pulp and paper mills of the Northeast in general are be- 
coming more and more dependent upon Canadian wood. So 
far as known, no company in the Northeast has sufficient hold- 
ings under present methods of management to guarantee any- 
thing approaching a continuous supply. Probably not over six 
companies control or own tiinberlands with supplies for more 
than 20 years. 

The drain upon the forests for newsprint is very heavy. 
One large daily, for example, which consumes 20,000 tons a 
year, requires for that brief period the product of a century's 
growth on 7,500 acres of eastern spruce forest. 

The present situation from tlie standpoint of timber supplies 
in the eastern United States for the newsprint industry is 
therefore very unfavorable, and the future holds no particular 
promise. The supplies already limited are being rapidly cut ; 
many mills are already without timber of their own ; the stands 
in eastern Canada have apparently been very much overesti- 
mated in the past; and little concerted effort has yet been 
made to increase the production of pulp woods in the North- 
east, where the industry is at present centered. Only such 
eflfort, together with the development of the industry in the 
West and in Alaska, where there are still large stands of timber 
suitable for newsprint paper, can assure production in the 
United States which will even approximate domestic require- 
ments. The situation as to other classes of paper is somewhat 
similar, although it may not yet be so serious, and is usually 
of less importance from the standpoint of public welfare. 
ALASKAN SUPPLIES OF PULPWOOD. 

Alaskan timber is so important from a national pulp-wood 
standpoint that it can not be allowed to pass without special 
comment. The timber, which is of particular interest, is on 
the Tongass National Forest in southeast Alaska. 

While much of this timber is of saw-timber size and will in 
the future become increasingly valuable for lumber, it is be- 
lieved that its real future is for pulp and paper. The stands 
are largely western hemlock and Sitka spruce, species now iu 
use on the Pacific coast for newsprint and other paper manu- 
facture. It is estimated that there are in the Tongass Na- 
tional Forest in the neighborhood of 70 billion feet board 
measure, in a comparatively narrow belt along the 12.000 miles 
or more of coast line. Water power is available, as is also deep- 
water transportation from numerous mill sites. This timber is 
for sale under practical and favorable terms and in amounts 
sufficiently large to Justify the installation of plants. Since it is 
in a National Forest it will be cut under methods which will 
insure permanence of production. 

It is estimated that the cut from this region alone will 
insure a perpetual supply large enough to meet one-half of the 
present newsprint requirements of the United States. There 
seems to be no reason why southeastern Alaska, situated in 
practically the same latitude as Norway and Sweden, should not 
become the center of a large pulp and paper Industry which 
will be a source of local prosperity and of great national im- 
portance in the light of our present dependence upon foreign 
pulp and paper production. Alaska, in other words, is one of 
the centers to whidi the newsprint industry of the United 
States should look for a large future development. The same is 
true of other centers in the West, where immense sources of 
pulp wood supply are now almost wholly undeveloped. Much of 
this timber is in the National Forests. 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



29 



THE MOVEMENT OF PRICES. 

Figure 2 shows the trend of pulp-*oocl prices in New England 
and contract newsprint prices and consumption in the United 
States since 1899. Spot niarliet prices are shown for 1919 and 
1920. Competition among American mills and between the 
American and Canadian product kept down the contract price 
(if newsprint until 1916, in spite of the increasing cost of pulp 
wood. Another factor in keeping prices of newsprint down 
was the introduction of cheaper methods of manufacture, the 
effect of whicli was, in part, at least, to help to reduce prices 
between 1900 and 1909. 

The general contract price level as represented by 100 per 
cent is .$2 per hundred pounds. This price level obtained until 
in 1916 the increased demand for new.sprint outstripped pro- 
duction, and competition among purchasers for inadequate sup- 
plies succeeded that among producers to dispose of their pro- 
duct. Increasing demands and growing competition among 
newspapers forced contract prices up to .?4.50 in 1920. The 



































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Fig. 2. — Rise of consumption and selling prices of newsprint in 
the United States and of the price of pulp-vood in New England, 
1899-1920. 

curve as it stands does not take one important factor into ac- 
count. Prior to the war the contract price was f. o. b. point 
of consumption, but during the war contract prices were 
changed to f. o. b. paper mill. 

Spot market prices are shown only during 1919 and 1920, 
because prior to that time they are rot available as separate 
quotations. In general, however, spot market prices before the 
war followed contract prices closely, and at times were even 
below them. 

Prior to the war a relatively small percentage of the total 
newsprint consumption was handled on the spot-market basis. 
The larger new.spapers particularly secured all, or practically 
all, of their supplies under contract. During the last year the 
larger new.spapers have found it increasingly difficult to secure 
all of th?ir supplies under contract, and have been forced to 
secure the remainder in the open market. It is in the open 
market that the full effect of competition for inadequate sup- 
plies is shown, and tills is reflected in the much higher prices. 



It is here that the speculative element in the handling of a 
necessary commodity at a time of shortage is fully brought into 
play. Unfortunately it is upon the spot market that the smaller 
newspapers, least able to increase returns by increasing adver- 
tising material and raising their advertising rates, must depend. 
The depletion of timber supplies is first shown in competi- 
tion for pulp wood and steadily increasing prices. Competition 
among producers for the sale of their product resulted for a 
considerably longer period in keeping newsiirint prices at a 
fairly constant level. Only when the available timber sup- 
plies of the regions in which the newsprint industry had been 
developed became so short as to prevent normal additions to 
plant capacity and demand for newsprint exceeded its pro- 
duction did newsprint prices advance. Depletion has resulted 
since 1899 in a large increa.se in both pulp-wood and newsiirliit 
prices. It is merely the time when and rate at whicli the 
increase took place that has varied. 

NAVAL STORES SUPPLIES. 

DEVELOPMENT OF THE INDUSTRY. 

So pronounced is depletion of the timber upon which our 
naval-stores industry depends for Its supplies that it Is com- 
monly regarded as a dying industry in the United States. In 
colonial days, when the wooden shipbuilding industry of New 
England was of great importance, naval stores for domestic 
consumption, as well as for export, were secured from the pLtcIi 
pine from Maine to New Jersey. The present-day naval-stores 
industry dates back also to early colonial times, but uses the 
longleaf and slash pines of the South. 

The very name of the industry is no longer appropriate, since 
the bulk of its products— spirits of turpentine and rosin — are 
largely used for purposes having no connection with .shipping. 
They are important constituents in such products as soap, paint 
and varnish, paper sizing, printing ink, greases, oils and belt 
dressing, soldering flux, shoe polishes, roofing and linoleum, tly 
paper, sealing wax, electrical supplies, matches, and varlou-; 
articles in the drug trade. The annual products of the industry 
exceo-d $40,000,000 in value, more than half of which comes 
front exports. Since the Civil War it has held a place among 
the industries of the South inferior only to agriculture and 
lumbering. Since 1820, or in fact since .statistics of any value 
are available, American production has led the world, and even 
at the present time is approximately SO per cent of the total 
world production. 

For the South as a whole, production has been falling off for 
a number of years. From slightly less than 34,000,000 gallons 
of turpentine in 1899, the first year of satisfactory statistics, 
it declined to approximately 17,000.000 gallons in 1918, a de- 
crease of 50 per cent. Rosin production during the same period 
fell a proportionate amount. 

The average production of the lust six years has been 25,000,- 
000 gallons of spirits of turpentine and 834,000,000 pounds of 
rosin, a production which has been easily absorbed by the 
world's industries. 

REMAINING SUPPLIES. 

A study of the opinions and estimates of a number of the best- 
informed men in the industry, men representing every part of 
the territory and having more than ordinary means of informa- 
tion, indicates that there are not more than 31,000 crops of 
turpentine timber available and uncuppe<l in the naval stores 
territory to-day. From this amount of timber it is estimated 
that not more than 166,000,(XX) gallons of turpentine and 5,000,- 
000.000 pounds of rosin can be produced. In addition to the 
uncu|iped supply of timber, that which has been or is now 
being worlced will probably yield 00,000,000 gallons of spirits 
of turiientine and 1,000,(MH),000 pounds of rosin, making the 
total available supply 226,000,000 gallons of spirits of tur- 



30 



TIMBKR DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



pentine and 0,900,000,000 pounds of rosin. Our own markets 
and e.\port demands will, it is believed, absorb 25,000.000 gallons 
of spirits and 825,000,000 pounds of rosin annuall.v. At this 
rate the suppl.v of timber now in sight would be e.xhausted in 
less than 10 jears. It will actually be extentled beyond this 
period by the production of wood turpentine and rosin and also 
by the gradual falling off in the rate of production as the re- 
maining timber supplies become exhausted. The indications 
are, however, that the production of gum naval stores in the 
southern pine belt will within 10 years have been reduced to 
such an extent that export nuirkets and even our own must look 
elsewhere for their main supplies. 

The naval stores industry of the South has migrated from 
State to State, following the timber. North Carolina, where 
now production is negligible, was for many years the leading 
State. South Carolina has been practically abandoned by the 
industry for more than 20 years. Rising prices have induced 
a few operators to go back over the territory to work scattered 
second-growth stands and isolated patches of virgin timber, but 
it seems probable that these supplies will be exliausted within 
four years. Well-informed men in tlie industry believe that in 
from four to six years under present demands Georgia will 
take its place with North and South Carolina as an insignificant 
factor in production. 

Florida has been the mainstay of naval stores production 
during the last 10 years, but the end of Its supply is definitely 
in eight. Of late the value of its product has been more than 
twice as nmch as that of any other State, and nearly half the 
value of the naval stores produced in all Southern States. 
Fairly accurate data on the resources of Florida have been 
eompiletl by some of the large naval stores interests. This in- 
formation, checked by estimates of well-informed operators iii 
various parts of the State, indicates that at the current rate of 
production Florida can not hold its own for more than eight 
years. That the State will soon be brought to the position of 
North and South Carolina and Georgia is improbable, since a 
very considerable portion of the remaining timber is held by 
strong corporations in large, well-blocked bodies, and it is to be 
expecte<l that exploitation will be more conservative and less 
wasteful and hurried. It is the opinion of the well-informed 
men in the Florida industry that not more than 5.000 crops of 
uncupped timber available for operation remain in the State. 

Much of the longleaf and slash pine of Alabama has already 
been worked, and the greater portion of the remaining stand 
of uncupped tiniber is in the hands of large lumber companies. 
Turpentine operators, judging from the present rate of lumber- 
ing, foresee a possible increase in production for the next three 
years, followed by a very rapid reduction. They believe that 
the State will be practically eliminated as a large producer of 
naval stores within five years. General opinion places remain- 
ing stands at not more than 1,0(.10 crops, including all second 
growth now merchantable. 

Well-informed observers believe tliat Mississippi will show 
an increase in production during the next four or five yeai-s. 
The timber, however, both here and in Louisiana and Texas, is 
largely owne«l by lumbermen who will force a rapid exploita- 
tion for naval stores in order that the lumbering may not be 
delayetl. Five thousand crops of uncuppetl timber are esti- 
matetl. It is predicted that the crest of production will have 
been passetl within five years, and that this will be followed by 
a rapid decline. Within eight years Mississippi will not be a 
leading State in naval-stores production. 

The industry is comparatively new in Louisiana. The timber 
is largely held by lumbermen who excludetl naval-stores opera- 
tions very generally until four or five years ago. Much of the 
tiniber has been and some of it is still being cut unturpentined. 
The average tuiiientine lease on many of these large holdings 
does not exceed two years in length. Of the 27 billion feet of 



longleaf pine in Louisiana the removal of 20 billion feet for 
lumber is pretlicted during the next 10 years. A yield of not to 
exceed 13,500 crops is anticipated. Operators familiar w-ith the 
situation agree that 10 years will probably see the beginning of 
a very rapid decline in production from Louisiana, and 15 
years the end of the present supply. 

Sawmills will probably remove 7,500 million feet of the 11 
billion feet of longleaf pine in Texas during the next 10 years, 
and Texas is the last stand of the turpentine industry in the 
South. Naval-stores production in Texas will be increased rap- 
idly as the Eastern States are exhausted, but operations will 
be seriously curtailed by the desire of timber owners to exploit 
the stands for lumber. The naval-stores industi-y e.stimates 
that there are not more than 4,600 crops in Texas and predicts 
practical exhaustion within 10 years. 

METHODS OF EXPLOITATION. 

While the rate of depletion of the supply of naval-stores tim- 
ber has been greatly accelerated during the last few years by 
the rapid cutting of timber controlled by lumber interests, the 
naval-stores 0|ier.itois themselves are responsible for the fact 
that what was once the largest and finest naval-stores forest in 
existence is about to become a matter of history. The method 
of exploitation commonly followed during the last hundred 
years is crude, wasteful, destructive, and sadly shortsighted. 
Under the driving urge of maximum financial returns in a mini- 
mum of time, regardless of after effects, turpentine orchards 
even to-day are operated so destructively that the trees are ex- 
hausted in from four to six yeai-s and turned over to the saw- 
mill man showing a loss due to turpentining of from 20 to 50 
per cent. 

That quick exhaustion of the turpentine productivity of the 
tree, and, in many cases, its early destruction, is not a necessity 
in the production of naval stores is shown by the French naval- 
stores industry. For the last 80 years a system of operation 
has been followed in France that permits an orchard to be 
worked for turpentine for from 30 to 50 years, practically with- 
out loss of timber. Coupled with this admirable system of opera- 
tion is it plan of management under which a crop of new timber 
is continually growing into maturity to fill the gap left by the 
harvesting of mature tiniber. As a result of sucli foresight the 
French supply of naval stores is increasing yearly, both in value 
and in amount. 

Conservative methods of turpentining in soutliern pine forests 
have been developed by the Forest Service and are now in com- 
mercial use on the Florida National Forest, and on private 
holdings of some of the more progressive operators. Inertia, 
not financial obstacles, must be regardetl as the chief reason 
why these conservative methods have not been more generally 
employed. They make entirely possible, when combined with 
intelligent forest management, a permanent as against a self- 
destroying industry. 

DEPLETION AND PRICES. 

As in the case of lumber and newsprint, the superficial cause 
of abnormal prices is a combination of abnormal demand and 
shortage of the manufactured product. The stocks of turpen- 
tine and rosin at the chief points of concentration were lower 
at the end of the last naval-stores season than has been the 
case in many years. At the same time the demand, both 
foreign and domestic, has been stronger than at any other 
time during the past five ye-.irs. The natural result has been 
keen competition for supplies on hand and consequent rise in 
price. As in the case of lumber and other industries, there 
have been increased costs. It has been difficult to secure aile- 
quate supplies of skilled labor. Credit inflation alone would 
have increased prices, but the fundamental difficulty has been 
the depletion of the timber supplies from which naval stores 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



31 



cnn be secured iiiui the great limitation of tlie producing regions 
already discussed. The price of spirits of turpentine, which 
for very many years fluctuated slightly above and below 50 
cents a gallon, had risen nearly five times to a price of $2.30 
early in 1920, and similar increases occurred in prices for 
various grades of rosin. 

With a prospective reduction in domestic production, the 
United States is facing in the near future rapidly decreasing 
ability to export naval-stores products, and even within a few 
years to meet home demands from the southern pine territory. 
There are possibilities of development of the industry with 
otlier species in the West, but under much more adverse con- 
ditions as to accessibility, labor, etc. The only other possi- 
bilities are imports or the use of substitutes. 

ORIGINAL AND PRESENT FORESTS OF THE 
UNITED STATES. 

ORIGINAL FOREST AREA. 

The original forest area of the country is estimated to have 
been in the neighborhood of 822,000.000 acres. (See Table 3 
and tig. 3.") In the eastern United States a magnificent forest 



" Various terms found in these and other aocnmDanying tables and 
figures are used with the following meanings : 

" Saw-timher areas" and "saw-timber stands" are stands of saw- 
timber size in accordance with the prevailin'r log<;ing and milling prac- 
tice of the region concerned. 



of old-growth timber, wonderfully rich in variety of species 
and quality of material, stretched in an almost unbroI<en ex- 
pan.se from the Atlantic Ocean to the prairies. Pines and other 
softwoods predominated in the north and along the -Vtlantic 
and Gulf coasts, while in the Appalachians and on the fertile 
sdils of the Central States anid the lower Mississippi Valley 



" Cordwood areas " and " cordwood stands " are stands not now of 
sufficient size to produce saw timber under the prevailing local logging 
and milling practice. 

" Nonrcstocking areas" comprise lands that once supported a stand 
of timber, which is now gone, and which is not being renewed. 

"Virgin areas" and "virgin stands" comprise stands in which 
there is no net growth, such growth as takes place being offset by losi! 
from decay and oiher causes. This excludes certain old-growth stands, 
as, for example, in California, which have not been lumbered and are 
ordinarily regarded as " virgin " forests, but in which a net growth is 
now taking place as a result of the present protection of such stands 
following their opening up by Are. 

"Growing areas" and "growing stands" include all stands, irre- 
spective of their si:;e, in which current growth is in excess of current 
loss ; that is, in which there is a net growth. 

" Saw timber " comprises that portion of the stand on saw timber 
areas of sufficient size tor manufacture into lumber. Board feet esti- 
mates of saw timber are given in terms of lumber tally rather than 
log scale. 

" Cordwood ' comprises that portion of the stand on saw-timber 
areas not of sufficient size for manufacture into lumber and the entire 
stand on cordwood areas. It may thus include occasional trees of 
saw-timber size which occur in cordwood stands but not in sufficient 
quantity to he lumbered. 

" Total stand " includes both saw timber and cordwood. 



£Inq/and 

M/dd/e 
Atlantic 

Lake 
Centra/ 



S.Atlantic[ 

and \ 

EastGu/f I 



Lo\A/er 
M/'ssiss/pp. 

Rocky J 
Mountains 

Pacific 
Coasts ^ 



Or/gin a/ Forest Area 
Present \/ir^/n Forest Area 
I 1 Remainder of present Forest Area 



* Compiete data for this r eg/on not a vail- 
ab/ej, present total Forest Area probably 
^n \some 5 million acres more than md/cated. 
■ I \ \ \ 



SO 4-0 60 80 100 

/\4ii lion Acres 

Fig. 3. — Original and present forest areas of the United States ■ 



32 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



oak, hickory, iisli, chestnut, yellow poplar, and other valuable 
barihvoods abouuiled. In the West practically all of the area 
not too arid to support tree growth was also covered with a 
foi-est of virgin timber interspersed with occasional patches of 
youngtjf, even-aged stands, as of Douglas fir and western white 
l)iue; ftHIowing fire. Along the Pacific coast the heavy stands 
of re(l%»od, Douglas fir, western hemlock, and western red 
cedar formed one of the finest forests in the world. 
PRESENT FOREST AREA. 
To-day of the original forest area there remains but little 
more Ihan half or approximately 463,000,000 acres, excluding 
in both eases from 100 to 150 million acres of low-grade wood- 
land and scrub. (See Table 4 and fig. 4.) Furthermore, 
so far has the utilization of the original "forest progressed 
that of the total remaining area only 30 per cent, or 137 
million acres, is virgin forest. The remainder includes 112 
million acres of second-growth saw timber, 133 million acres 
of second growth below saw-timber size, and 81 million acres 
which are not restocking. Cutting has naturally been heaviest 
in the most fertile and most densely populated sections of the 
country. Thus in the Central States the original forest has 
been reduced to one-third of its former extent, while in the 
Rocky Mountains 95 per cent of it still remains. More than 
half of the virgin forests of the country are in the Western 
States, only 15 per cent of the virgin forest area being In- 
cluded in the Northern and Central States. Over nearly a fifth 
of the present forest area the original timber growth is not 
being renewed. The Ir.rgest areas of nonrestoeking land are 
in northern New England, Pennsjivania, the northern Lake 
States, the pine lands of the South Atlantic and (Julf States, and 
parts of the Pacific coast States. 

T.\BLE 3. — Original and present forest areas in the United States 
by regions. 



Region. 


Original. 


Present. 


Total. 


Virgin. 


New England 


Acres. 
38,908,000 
69,610,000 
103,680,000 
170,560,000 
170,240,000 
12S,400,000 
63,720,000 

77,m,m 


Acres. 
24,708,000 
28,678,000 
57 100 000 
56,682,000 
99,000,000 
78,865,000 
60,842,000 
57,586,000 


Acres. 
2 000 000 




i;i?;Z 






7 ISO'OOO 




18,300,000 
20,835,000 
37,746,000 


Lower Mississippi 


Pacific coast 








822,238,000 


463,461,000 


137,396,000 





i^sent forest area of the United States by regions 
and eharacter of growth. 



Region. 


Total • 
(thou- 
sand 
acres.) 




Saw timber 
(thousand acres). 


Cord- 
wood 
(thou- 

acres). 


Non- 
restock- 
ing 




Virgin. 


Grow- 
ing. 


acres.) 


New England 


24,708 

56,682 

99,000 
78,865 
60,842 
57:586 


5 
6 
12 
12 

22 

17 
13 
13 


18,300 
20,835 
37,746 
39,369 


13,930 
23,301 

27,900 
20,200 
3 313 
5,292 


8,372 
10,-793 
12,570 
24,011 

32,080 
24,075 

";«5 


5,575 
6', 430 








2; 220 


South Atlantic and East 


20 720 




13; 755 
5 250 




Pacific coast ' 


el 500 






463,461 


100 


137,396 


112,256 


132,859 









Table 5. — Stand of saw timber in the United States by regions. 





Saw-tim- 
ber area 
(thousand 
acres). 


Total saw timber. 


Softwood 
(million 
board 
feet). 


Hard- 
wood 
(million 
board 
feet). 


Region. 


Million 

board 
feet. 


Per 
cent. 


New Eneland 


10,761 
11 455 
24,030 
30,451 
46.200 
41,035 
41,059 
44,661 


49,799 
44,857 
110,110 
144.470 
220.577 
280,908 
223,141 
1,141,031 


2 
2 
5 
7 

10 
13 
10 
51 


38,480 
15,363 
40, 760 


11,319 




29 5M 


I'lke!! . I';:::::::::::::::::: 


69,350 


South Atlantic and East Gulf 


136,827 1 83,750 
148,308 132,600 
223; 141 ....'.... 


RXStT:;::::::::;;;::: 






Total 


249,652 


2,214,893 


100 


1,755 218 4.'i9 fi-B 









SAW-TIMBER STANDS. 

The original stand of saw timber has been estimated at not 
less than 0,200 billion board feet. In the light of the cut that 
has already been obtained, and of present standards of utiliza- 
tion, it is probable that the actual stand was considerably 
larger. Even taking the lower figure, however, less than half 
of the original stand, or 2,215 billion board feet, still remains 
(see Table 5 and fig 5). Of this some 1,755 billion feet is 
softwoods and 460 billion feet hardwoods. Approximately 70 
per cent of the total stand, including the best and most acces- 
sible timber, is in private ownership, while about 498 billion 
board feet, or 22 per cent, is included in the National Forests. 
States and municipalities together hold only 59 billion board 







/Lotyer Af/ssiS5/pp/- 

A'oc/ry Mountain. 

* 
^ocific Coasts _ 

M/7fion /7c. 



.0 /O 20 30 40 50 

. Comp/efe dafa for fhis region not afai/abie ; fofa/ Ybresf area 
probab/y some -f/fe mi/lion seres rnore fhan /nc^/caYed 

Fio. 4. — Forest areas of the Dnited States by regions and character of growt 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



33 




^^ SOFTWOODS 
I I HARDWOODS 



Fig. 5. — Stand of 



JOO 600 700 8i 

BILLION BOARD FCCT 
timber in the United States by regie 



feet. 



less than 3 per cent of tlie total. (See Table 6 and 



The exhaustion of the eastern forests and the steady progress 
of the lumber Industrj' toward the West is well indicated by 
the location of the remaining stands of sawtimber. Thus, New 
England, the Middle Atlantic, Central, and Lake States, with 
35 per cent of the total forest area, contain only 349 billion 
board feet, or 16 per cent of the total ; while the Pacific Coast 
States, with only 13 per cent of the forest area, contain 1,141 
billion board feet, or nearly 52 per cent of the total. ( See 
fig 7.) Between these two extremes come the South At- 
lantic, East Gulf, and Lower Missis.sippi States, with 39 per 
cent of the forest area and 23 per cent of the sawtimber; and 
the Rocky Mountain States, with 13 per cent of the forest 
area and 10 per cent of the sawtimber. Altogether, 61 per 
cent of the present stand of sawtimber lies west of the Great 
Plains. 

In other words, the depletion of our eastern forest resources 
has now reached the point where the softwood stands in the 
Northern and Central States can no longer contribute any large 
proportion of the total softwood lumber consumption of the 
country, where the Southern States are losing the command- 
ing position that they have held for the last 20 or 30 years, 
and where the one great reservoir of softwood timber still left 
lies on the Pacific coast, chiefly in the Pacific Northwest. 
Douglas fir, with an estimated total stand of 596 billion board 
feet, approximately 85 per cent of which is in the two States 
of Washington and Oregon, is the principal species in the West. 
(See Table 7 and fig. 8.) Western yellow pine is a fair 
second, with a total stand of 250 billion board feet, 27 per cent 
of which is in the Rocky Mountains and 73 per cent on the 
Pacific coast. Following these two species, which together com- 



prise nearly half of the softwood sawtimber in the entire coun- 
try, come western hemlock, the true firs, and redwood, with 
stands of 95, 91, and 72 billion board feet, respectively. 

Table 6. — Ownership of forest area and stand of sawtimber 
in the United States by regions. 







Federal. 


Private. 


Region. 


Total. 


Total. |N<^^f 


and 
munic- 
ipal. Total. 


lots. 


Eastern United States.... 
Rocliy Mountains 


Thaw- 
sand 

acres. 

345,033 
60.842 


Thou- 1 Thou- 
sand sand 
acres. ' acres. 
5,578 4,578 
5i;681 48,281 
30,319 26,876 


Thou- Thou- 
sand sand 
acres. acres. 
4,300 335,155 
1,411 7,750 
1,475 25,792 


Thou- 
sand 

1M,'465 




57;r86 










463,461 


87,578 , 79,735 


7,186 368,697 









Million Million 

board board 

feet. feet. 

Eastern United States. ... 850, 721 8, 184 

RockT Mountains 223,141 157,618 

Paciflc Coast 1,141,031 434,300 

Total 2,214,893 600,102 



Million Millio 
board board 
feet. ' feet. 



Million muion 

board \ board 

feel. feet. 

S.32,537 ; 340,288 

5.5,732 (') 
667,731 , (') 



497,633 58,791 1,556,000 



' Not indicated because of lack of data. 

In the East the only softwood with a stand comparable to 
any of these is southern yellow pine, with a total of 258 billion 
board feet, or slightly more than western yellow pine. (See 
Table 7 and fig 8.) Spruce and fir come next, with a stand 






mi 



Paci 



Eastern U.S. 

RocHy Mountains 

Pacific Coast 



ZOO 300 400 SOO 600 700 800 900 1000 1100 

STAND - BILLION Bd. Ft. 

■ National Forest ED Farm Wood lots in Eastern U.S. 
™„ (Not estimated for western U.S.) 

M Other Public ^ * 

U Other Private 

Fig. 6.— Ownership of forest area and stand of paw timber In the United States by regions, 



34 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



of 32 billion iMiard I'cct, followed by hemlock, white and 
Norway piin', and bald cypress. The stand of these six species 
togetlier is considerably less than half as much as the stand 
of southern yellow pine, and is only 6 per cent of the total 
stand of so'ftwoods. The total saw-timber stand of white pine, 
once regarded as " inexhaustible," is now less than the amount 
estimated to have been manufactured into lumber in either the 
Saginaw Valley or at Muskegon, Mich., and less than one-fitth 
of tlie total estimated cut from the State of Michigan. 

Of the hardwoods the only large reservoirs of virgin timber 
still left are in the Lake State, the Southern Appalachians, and 
the lower Mississippi Valley. The first two of these contain, 
i-espectiveiy, about 32 and 53 billion feet of old growth. There 
is also a considerable total stand of hardwoods, estimated at 
approximately ]33 billion board feet, in the Central States out- 
side of the Appalachians, but this is composed chiefly of second- 
growth material in widely scattered wood lots, and can not be 
counted on to contribute any large proportion of high-class 
iii.itcrial to the hardwood industries. Oak is easily the lead- 
in;; liardwood of tlie country, with a total stand of 157 billion 
lioard feet, followed by the three northern hardwoods — birch, 
beech, and maple— having together 91 billion board feet. (See 
Table 7 and fig. 8.) Three of the most valuable hardwoods- 
hickory, ash, and yellow poplar — together have an estimated 
stand of only 35 billion board feet, or less than 2 per cent of 
the total stand. That the depletion of the hardwood supply 
of the country has progressed even further than that of the 
softwoods is indicated by the fact that the hardwoods consti- 
tute only about 20 per cent of the saw-timber stand, as against 
nearly 30 per cent of the saw-timber cut. Moreover, the deple- 
tion is particularly marked in the case of the more valuable 



While the cordwood forms more than one-tliird of the total 
volume of standing timber, less than one-sixth of the total is on 
the cordwood areas, which average only about S.^0 cubic feet to 



Ncx England. . _ 
M,ddle/Jtlantic\ 


ni 
=] 

m 












f 


^■^H 


1 


■1 t-ore3t /irea 
^MSawtimher Stand 
1 1 Total Stand 


Lake..^ A 


MH 


1 


1 


Central \ 


[unimin 






















^ ., „ I , { 


■i^H 




1 




IIIIHIIIIIIIIIII 






East Gulf--- I 




Zl 








Lower \ 
Mississippi- \ 




I^^B 


lllillllllll Illllll 




1 








ffocAj/ J 


IHHI 


■ 


iiiiiiiiiiiiiiiii 


^ 


Mountain 1 






f 




aci ic 1 


^S 






llllllllllllll 


n 


Coast---.. \ 








1 ' 







Percent 
'.- Per cent of total forest area, total Siiw timber stand, and 
total stand by regions. 



Table 7. — Stand of saw timber in the. United States hy species and re(jh 
[Quantities in million board feet, lumber taII.7.I 



Species. 


Total. 


New 

England. 


Middle 
Atlantic. 


Lake. 


Central. 


South 
Atlantic 


Lower 

Mississippi. 


Rock.v 
Moimtain. 


Pacific 
coast. 




459,675 


11,319 


29,504 


69,350 


133,152 


83,750 


132,600 










Oak 


157,372 
90,784 
44,222 
19,319 
151784 
10,824 
9,988 
9,611 
101,771 


kf& 


il:l?7 

176 
3,754 

412 
13 

513 

126 
2,113 


36;076 


64,712 
20,605 

2,929 
5,193 
19,174 


4; 522 
13,400 
6,616 

Ufo 

1,256 
4,020 
21,524 


49,460 
4 641 
26,918 












Chesfnu" 


374 
215 




:.| 




187- 

999 

1,893 

7 

21,887 


5,171 
5,967 
3,182 
265 
36,996 
















Yellow Doular 






otE'^'^ ::;::::::::::::::::::::;:::;:::::::::::: 


77' 








391,046 


38,480 


15,353 


40,760 


11,318 




' 148,308 














257,691 
30,896 
31,572 
22,921 
23,457 
24,509 








365 
3,910 


121,442 

1,845 

881 

'362 


135,884 








1,804 
23,971 


lf& 


18,301 
3; 772 


















11.713 








9,816 


.3;3i2 


8,000 
10,687 


.515 
■ 6,528 






others 


711 








1,364,172 


















223, 111 




















Douglas fir 


595,505 

91,349 
72,208 
57,071 
53,348 
43,919 
39,822 
66,280 














39,934 

. 66,125 

1,092 

8,870 


.5.58,571 
















183,453 
















94:000 


















Redwood 














72,208 
















18,586 
4,348 
39,353 
26,467 
21,366 


38,485 
















49; 000 


















Spruce 












13,355 














44,914 

















I Includes small amounts of various species of yellow pine. 



TOTAL STAND. 

Tlie total volume of standing timber in the country, includ- 
ing both saw timber and cordwood, is estimated roughly at 746 
billion cubic feet. Of this. 48o billion cubic feet is saw timber 
and 261 billion cubic feet cordwood. (See Table 8 and fig. 9.) 



the acre. This low average is in itself a striking indication of 
failure to secure a satisfactory restocking of our cut and burned 
over forest lands. This failure will have increasingly serious 
consequences, as depletion of the old-growth forests makes us 
more and more dependent on second-growth timber. 



JOO -too MO 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 

jO I40O /600 



300 'OOO 



CAiT£:f>fj ^orr WOODS 



wesTtRN sorrwooos 



BILLION BOARD FEET 



■-timber stands of some ot the more important species in the United States. 



Table S. — Total stand in cubic feet on saw-timber areas and 
cord wood areas in the United States by regions. 





Total stand. 


Stand on— 


Region. 


Million 
cubic 
feet. 


Per cent. 


Saw tim- 
ber areas 
(million 
cubic 
feet). 


Cordwood 

areas 
(million 
cubic 
feet). 


New England 


50,584 
85,118 


3 
3 
7 
11 
13 
16 
8 
39 


15,492 

17,126 
41,534 
61,319 
73; 060 
95,252 
53,755 
274,874 


5 S.'iS 




7:77? 






Central 


23,799 
23 098 


South Atlantic and East Gulf 




23,112 
8,138 
12 850 




Paoiflc coast 








745,588 


100 


632,412 


113,176 





LOCATION OF REQUIREMENTS WITH REFERENCE 
TO PRODUCTION AND SUPPLIES. 

Ill the comparatively near future all of our eastern timber 
regions wliich do not already import more lumber thian they 
export will begin to do so. 

The .southern pine region as already shown is still a large 
exporter, but within 10 years production promises to be little, 



if any, in excess of local requirements. In New England total 
consumption probably passed total output between 1880 and 
1890, and within a few years this section will meet half of its 
total requirements from outside sources. New York has not 
produced lumber in excess of its own needs since a few years 
before the Civil War. The Pittsburgh district alone probably 
uses more lumber than is now cut in the entire State of Penn- 
sylvania, and the State ceased to be an important exporter 
shortly after 1890. The Lake States as a whole still produce 
more lumber than they consume, but already Michigan and 
Wisconsin are net importers and U is practically certain that 
the Lake States as a whole will consume more lumber than 
they produce within 10 years. Ohio, Indiana, and Illinois since 
records have been kept have always imported more lumber 
than they produced. West Virginia, Kentucky, and Tennessee 
were probably net exporters for about 20 years after 1890, but 
if thrown together with Ohio, Indiana, and Illinois, they form 
a group which has always used more lumber than it produced. 
No lumber-producing region in the East can with certainty 
be counted on to produce more lumber in 1930 than it will con- 
sume. The southern Mississippi Valley and possibly the south- 
ern Appalachian Mountains may produce more hardwood lumber 
than is needed locally, but they also are likely to be net im- 
porters if all classes of lumber are considered. 



UetvErj/anc/ 

M/da>/e /lf/a^f,c^ . . _ 

/-aA-s 

Cen/^ra/^ 

£as^6a./y^. 

Loiver- M/sstssipp/'. . . . 

/foe Ay A4oany'a//7. 

Fac/i^/c Coasf: 



EM 



Ml 



Illlll 



IIIIIIIIIIIIIIIIKIIIIIIIIIIIIIII 



■ Cub 'c foof equii/a/en^o:^ dcZ-uez/ /urnSer o6^/^a6/e 
on saivf/mier areas OOOO 6oo/x/feef= ffJfcc/6/c /ee^J 

lllllllll ffemainc/er ofs^ancf on saw^/m6er areas 
I I S^and on condtvooe/ are/ss 



Fig. 9. — Total stand 



200 2ZS 2SO 

3, ///on Cu6/c /^ee/- 
cubic feet on saw-tiraber areas and cordwood areas in the United States by regions 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



A representative of the National Lumber Manufacturers' As- 
sociation " has recently predicted a decline in the cut of south- 
ern pine of 7 billion feet by 1930, and a further decline in other 
regions in the East of 2 billion feet, making a total of 9 billion. 
As further reducing the*eastern output available for general 
marliets he estimates an increase in export demand by 1930 of 
1 billion feet of southern pine and an Increase in local require- 
ments in the South from 7J billion feet to 9 billion. He esti- 
mates the total increased production necessary by 1930 from 
other regions In the United States or from foreign sources at 
Hi billion feet. 

From a prewar normal production of .southern pine of 15 bil- 
lion feet it is believed that a reduction to 9 billion by 1930 is 
very conservative, and the falling ofC of an additional billion Is 
well within possibilites. The reported output of the southern 
pine region in 1918 was only 11 billion feet. The prewar normal 
of all other softwood and hardwood production in the East was 
somewhat less than 1.5 biUion. and here a reduction of 3J billion 
feet in the cut by 1930 would be conservative, with possibly 



the western traffic during 1919 averaged slightly more than 
26.000 feet to the car. At this rate every additional billion feet 
of lumber shipped east would mean 40,000 additional carloads. 
Five billion feet would make 200,000 carloads. In addition to 
the difficulty in building and maintaining additional equipment 
are the physical difficulties involved in moving such vast 
amounts of freight. 

Assuming an average freight rate of $15 per thousand on 
shipments of lumber from the West and Increased demands 
upon that region of 10 billion feet in 1930, the annual freight 
bill for moving this timber to the eastern and middle western 
markets would be .$1.50,000,000. This is about one-half more 
than the present average transportation cost for the same 
quantity of lumber, and will form a part of the annual price 
of depletion. Prior to 1840 the entire lumber cut of the country 
was used within a comparatively few miles of the sawmill at 
which it was manufactured. Transportation costs from mill 
to market, then varying from .^l to $3 per thousand feet, have 
risen to a niaximura of $20 at the present time. 



TotaL 



26.0 



\6.0 



— Cut and Destruction 
Growth 



Softwoods 



\I4:0 



m 



-Cut and Destruction 
Growth 



Hardwoods 



\/2.0 



mi 



.Cut and Destruction 
Growth 



Billions of cubic feet 



Fig. lO.—Relat 



forest depletion and forest growth. 



more than half of this coming from hardwood production. 
While no exact prediction can be made, it is certain that the 
total decline in output will be very large. 

For hardwoods we can turn only to the tropics for materially 
increased supplies. For softwood lumber we still have large 
reserves in the West. Of the more heavily timbered Western 
States the least can be expected from Montana. Increased cuts 
are predicted from Idaho, California, and Washington by men 
in the industry most familiar with the situation. The main 
increases, however, will have to come from Oregon. So far as 
domestic production is concerned, the entire United States will 
therefore be chiefly dependent for lumber in excess of local pro- 
duction upon three or four States in the far West. 

The part of the lumber traffic from the West which is not 
handled by ocean shipments via the Panama Canal must move 
east over the main lines of the transcontinental railroad sys- 
tems. Even under conditions of the past 10 years there has 
been a constant complaint from lumber manufacturers of in- 
ability to secure cars. The situation has been at its worst dur- 
ing the past year. Shipments for a very considerable part of 



'• Life of the Softwood Lumber Industry, by F. V. Dunham, field rep- 
resentative of tlie National Luml>er Manufacturers' Association, South- 
ern Lumtierman, May 8, 1920. 



Even more important than the mounting costs is the menace 
involved in having the principal markets of the country so 
entirely dependent upon distant regions for the supply of such 
an important raw material as lumber. Some of the railroad 
difficulties have already been discus.sed. Labor troubles are 
another possible contingency. How seriously bad weather con- 
ditions of a season or two at the logging camps can affect many 
industries and clas.ses of consumers is now illustrated in the 
hardwood lumber region of the lower Mississippi Valley. Any 
one of many factors may disorganize the lumber markets and 
supplies of nine-tenths of the country, and a combination of 
these factors would be serious in proportion. 

If we elect to depend upon imports instead of home-grown 
timber, there is, first, the question of whether timber from 
foreign countries will be actually available. It would have to 
come from greater distances, and obstacles in the way of 
securing it would be correspondingly greater. Transportation 
and other distribution costs would be increased, and liigher costs 
are ordinarily represented in still higher prices to tlie consumer. 
Finally, we should have to compete for any supplies available 
with other countries which do not themselves produce all the 
timber they need. 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



37 



FUTURE TRENDS IN REQUIREMENTS. 

Future trends in requirements *ill be considered in detail 
only for lumber. Our requirements for pulp wood will expand 
rapidly, but the volume required, as compared with lumber, is 
small. 

The per capita lumber consumption in the United States in 
1850, the year of the first fairly complete lumber census, was 
only 230 board feet, with a lumber production of 5.4 billion 
board feet and a population of 23,192,000. It then increased 
steadily until it reached its crest of 515 board feet in 1906, 
with a total lumber cut of approximately 45 billion feet. From 
1906 to 1913 the per capita consumption declined to 430 board 
feet. The war curtailed production to 32 billion feet in 1918, 
or 300 board feet per capita, of which part was for war pur- 
poses. This restricted use resulted in the abnormal demands 
and unprecedented prices of the past year. 

The experience of industrial European countries gives some 
indication of what .\merican future requirements for lumber 



over four times that for the entire country, in I'ittsl)urt;h three 
times, and in Chicago at least double. 

Even with large allowances for the substitution of other ma- 
terials for timber, it seems hardly possible that our annual 
demand for lumber for years to come will fall below 35 billion 
feet. This is 5 billion less than the prewar average of approxi- 
mately 40 billion board feet. Even this will require a gradually 
reduced per capita consumption as population increases. For 
many years we shall find ourselves unable to satisfy our re- 
quirements with anything approaching the per capita consump- 
tion of either England or Germany. It follows that any future 
lumber production falling below approximately .35 billion feet, 
unless we can make up the difCerence by imports, will result in 
hardship to many classes of consumers and to many industries, 
like that experienced within the last year. Any such reduced 
consumption will unquestioniibly be the i-esult of economic pres- 
sure from lumber shortages and high prices rather than of eco- 
nomic convenience. We have onr warning in the present situa- 
tion. 



Soffivoods 

ana' 
A/ardi^ooc/s 



I 56 



UK 



\4^ 



UL 



n: 



. Groiv^h 



I Cuf anc/ c/es'/'r 






vy/~Oii^/^y . 



J //7 l///~^//7 S/i7/70^ 



-Grotv/-/} /n i//Vy/r> s /-area's 



/iardi^^oocys 



B///'or7S of Aoc7/~<y ft^er 

Fii;. 11.— K. I; 



. Gropv^h //7 i/zr-^/rr s/-a/7o(s 

-Groi/yf/? /r/^^oiv/ny s/ar^c^ 

Hon between lonst depletion aaa Krowth of saw tini 



will be. In England, for example, during the 60 .years from 
1851 to 1911 the consumption of lumber increased from 40 
board feet to 120 board feet per capita, although 95 per cent 
of her requirements must be met through imports at high cost. 
Similarly, German home production at least doubled during 
the 60 years between 1840 and 1900. Industrial development 
made it necessary to Import con.stantly increasing amounts of 
timber, and in spite of the cost of imported material, the per 
capita consumption at the outbreak of the war was about 150 
board feet per annum. 

The United States is still a new country. We still have large 
areas of undeveloped agricultural land. In much of our terri- 
tory first construction was of such a character that replacement 
on a larger and better scale will be desirable if not absolutely 
necessary. Our population is growing rapidly and there is no 
reason to believe that it will not continue to grow. Industrial 
development in many sections has hardly begun. How large the 
per capita consumption in industrial centers is may be judged 
from the fact that in St. Louis the i)er capita consumption is 
7797—20 6 



DEPLETION AND GROWTH. 

PRESENT DEPLETION AND GROWTH. 

The standing timber in the United States is being cut and 
destroyed at the rate of 26 billion cubic feet per year, or more 
than four times as fast as new timber is growing. (See Tables 
9 and 10 and fig. 10.) That of saw-timber size is being cut for 
lumber and other uses and destroyed by fire, disease, and insects 
at the rate of 56 billion board feet per year, more than five and 
one-half times the growth of such material. (See fig. 11.) 

Such data as are available (see Table 9) indicate that about 
40 billion board feet is taken each year from our remaining 
virgin stands, in which there is no net growth in exc-ess of de- 
cay. The other 16 billion board feet comes from growing 
stands, but their growth is only 10 billion feet annually. In 
other words, besides the very heavy drain on our rapidly 
diminishing supply of virgin timber, we are cutting even the 
second growth .saw timber more than one and one-half times as 
fast as it is being replaced. 



38 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



Comparison of the rates of depletion and of growtii of all 
timber below saw-timber size discloses that even this material 
is being used up three and one-half times as fast as it grows, 
or at the rate of about 14 billion cubic feet, as compared with a 
growth of only about 4 billion feet. (See fig. 12.) If this 
serious situation continues it will reduce very materially the 
volume 111' the ni.-itcM-ial which can reach saw-timber size in the 
future. 

This dcplclion nf small timlier is proceeding at an especially 
rapid rate in the case of hai^Uvoods, perhaps in part because 
the supply of larger timber has been practically exhausted in 
several regions. Tlie cut of cordwood material in hardwoods 
amounts to 8i billion cubic feet, five times the growtli. 



[TIT 



] Cordwood cut and destroyed 
Cordt^o 



\^' 1 

W5 — 
m 

/on/s or CUBIC res 



Cordwood cut and destroyed 
Cordwood grown 

] Cordwood cut and destroyed 
Cordwood grown 



forest depletion and growth of cordwood. 



Table 9. — Timher removed each year from the forests of the United States. 



Cut. 


Quantity. 


Equivalent in lumber which could have been 
sawed from the same trees. 


Equivalent in standing timber. 




Hardwood. 


Softwood. 


Total. 


Hardwood. 


Softwood. 


Total. 


Lumber 

Hewed ties 

Pulpwood 

Round mine timbers 


40,700,000 M board feet 


Board feet. 

8,700.000,000 

2,100,000,000 

200,000,000 

375,000,000 

165,000,000 


Board feet. 
32,000,000,000 
525.000,000 
1,400,000.000 
37.^000,000 
660,000,000 
200,000,000 
890,000,000 
20,000,000 

100,000,000 

120,000,000 
55,000.000 
15,000,000 
40,000,000 

105,000,000 


Board feet. 

40,700,000.000 

2.625,000,01)0 

1,600,000,000 

750,000,000 

825,000,000 

2.55.000,000 

890,000,000 

870,000,000 

200,000,000 

780,000,000 
435,000,000 
1.55.000,000 
305.000.000 
225,000.000 
90,000.000 
90,000,000 


840.000.000 
64,350,000 

11,700,000 


7%8.C0o','0O0 
210,000,000 
468,000,000 
162.600,000 
1,440,000,000 
43.550,000 
194,700,000 
3,190,000 

22,500.000 

18,400,000 
11,990,000 
3,250,000 
8,580,000 
22,726,000 


■ Cuikfeet. 
8,913,300,000 
1,0,50.000,000 


2.50,000,000 cubic feet 


325.000,000 


PoSfs"" ::: 


4,230,000 poles..;:.::::::;;:: 




Shingles 


8,850,000 M shingles 




194,700,000 




870 000 M board feet 


850,000,000 

100,000,000 

660.000,000 
380,000,000 
140.000,000 
265,000,000 
190 nnn mo 


196,500,000 

22.600.000 

101,200,000 
83,250,000 
29,250,000 
58,0.80,000 
26,7.'i0,000 
19,650,000 
3,900,000 


199 690,000 


wooden ware, furniture, etc. 

Export logs and hewn lim- 
bers. 

Veneer logs 






650 000 M feet logs 


119 600,000 












32:500:000 






P6,6P0.000 






49 475 000 


Trnnns 






PiunV"'"': :": 




20,000,000 


70,000,000 


16,600,000 




Lath 


2,376,000 M lath . . . 






1 550 000 cords 


375,000,000 
135,000,000 
60,000,000 




375,000,000 
135,000,000 
75,000,000 


163,800,000 

146.250,000 

18,720,000 

7,315,000.000 


17,550,000 


191 360,000 


Tanning e.xtract 

Kxcelsior 








200,000cords 


• 15,000,000 


4,680,000 
3,135,000,000 


23; 400:000 


Fuel wood 


110 000,000 cords 


10 450,000.000 
















14,790,000,000 
500,000,000 

•wo.ooo.ooo 


36,590,000,000 
1 750 000 000 


51,380,000,000 
9 om mn nnn 


11,. 528, 700, 000 

330,000.000 
125,000,000 


12,790,215,000 

750,000,000 
525,000.000 




Dest^royedb.v- 




1,080,000,000 






2:000:000,000 2,506,066.000 










Total 


15 790,000 000 ! 40 .fJO 000 000 ."ifi l.'iO 000 000 


11,983,700.000 


14 065,215,000 


26,048,915,000 








1 









-1918 was taken (5 prewar and 



T.\Bi.E 10. — Annual growth of smc timher and cordwood in the 
United States, hy regions. 



New England . . 
Middle Atlantic 

Lake 

Central 

South At Ian ti 
and East Gulf 
Lower Mis-tissippi 
Rocky Mountain 
Pacinc Coast 

Total 



17,133,000 
20,352,000 
26,500,000 



.59,980,000 
44,275,000 
17,846,000 
11,717,000 



Cubic feet. 
474,000,000 
499,000,000 



Annual growth. 
Saw timber. 



009,000,000 
714,000,000 
988,000,000 
1,458,000,000 



16 ,1,752,000,0(K) 
6 1 461,000,000 
12 ,1,262,000,000 



Cub'cfec. 
341, 000, ( 
342, 000, ( 



600, 000, ( 
264,000.1 
430,000,1 



With softwoods the depletion of saw tinrher Is more striking, 
although the cut of small timber is also considerably in excess 
of Its growth. Nearly three-fourths, or 40 billion board feet of 
the saw timber used and destroyed, comes from softwood for- 
ests, and about 32 billion feet of it from virgin stands. The 
total depletion of softwood saw timber is more than 6J times 
its annual growth of 6 billion feet. 



The enormous excess of depletion over growth of timber is 
not because of unduly large consumption of timber products. 
It is due in part to needlessly large losses from fires and other 
causes, which to a great extent can be controlled. But it is 
due most of all to the wasteful methods of cutting and to 
neglect of cut and burned over forest lands. There are now In 
the United States about 81,000,000 acres of waste forest land, 
devastated by cutting and by fires, on which nothing of value 
is growing or likely to grow without a huge expenditure for 
reforestation. This area is equal to the combined areas of the 
forest lands of France, Germany, Belgium, Holland, Denmark, 
Switzerland, Spain, and Portugal. Besides the waste land 
there are in the United States approximately 245,000,000 acres 
bearing second-growth forest. In a large part of this forest, 
wasteful cutting or excessive grazing have reduced production 
to a mere fraction of what it might be with proper handling. 
To convert such stands into valuable producing forests will in 
many cases involve expenditures as great as though the lands 
were devastated. 

The area of devastated and partially devastated land is 
rapidly increasing. Tinvberlands are cut over much more 
closely now than formerly, with the result that after fires 
have killed out most of the young growth on logged-ofE lands 
there is little or no chance for reproduction to start. At least 
5,500,000 acres of merchantable timber are cut over every year. 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



39 



Part of it restocks and part does not. During the period from 
1915 to 1918 an average of 9,400,000 acres of forest land was 
burned over each year, and in years lilie 1910 and 1919 tlie 
acreage was consideral)ly larger. Some of this land restocks 
and some becomes waste, while the productivity of practically 
all is reduced. 

POSSIBLE GROWTH. 

If all of this land had been cut over in the flrst place, with 
due regard to securing a future stand, and had been protected 
from tires or excessive grazing after cutting, it would now be 
producing timber at least three times as fast as at present. 
.Judging from the experience of other countries and from re- 
sults obtained where forests have been carefully treated in our 
own country, it is believed entirely conservative to assume that 



the 326 million acres could produce at an average rate of 60 
cubic feet of wood per acre per annum, or, in terms of saw 
timber. 150 board feet per annum. This would mean a total 
annual growth on the present area of cut-over forest laud, in- 
cluding that now deva.stated, of 19* billion cubic feet of wood, 
including 49 billion board feet of saw timber. At the same rate 
of production for the remaining 137 million acres of virgin 
forest in which there is now no net increment, our total com- 
mercial forest area is capable of producing annually, after the 
virgin timber has been cut off, at least 27J billion cubic feet of 
wood, including 70 billion board feet of saw timber. This ex- 
ceeds our present rate of use and destruction. With a rea- 
sonable per capita consumption, it would be able to meet in- 
definitely the needs of our growing population for wood and 
other forest products. 



FOREST DEPLETION AND LUMBER PRICES. 



The cour.se of lumber price.s in the United States has been 
very materially affected by the successive depletion of old and 
ilevelopmont of new tields of lumber production. As one great 
forest ref-'ion after another has been opened up two counter- 
iu-tiuK intlunices have been brought to bear on prices. One 
(if thest' lias been interregional competition. Exploitation has 
begun in new regions well in advance of exhaustion of the 
older sources of supply. The result has been to hold in check 
the gradual rise in price which would normally take place as 
competition relaxed with the diminution of supplies in the older 
royions inul as exploitation advanced from the most accessible 
anil easily lof-'^ed timber to that Involving higher costs of pro- 
duction and transportation. On the other hand the cutting 
out of the older regions and the resulting necessity of draw- 
ing lumber supplies from more distant fields has meant, of 
course, the periodic addition of new transportation costs. 

PRICE CHANGES AND REGIONAL DEPLETION. 

Thus prices have tended to rise at a step from one level to 
another and then to hold pretty well on this level for a term 
of years rather than to follow an ascending curve. This Is most 
marked with the softwoods. 

EASTERN SOFTWOOD MARKETS. 

Table 11 shows the lumber prices in eastern markets at 
five-year intervals from 1S40 to 1910 and yearly from 1910 to 
1920. The prices are computed throughout on a gold standard 
to eliminate the distortion resulting from depreciated values 
cluriim the paper-currency period. 



Taule 11. — Trend of at 



values {eastern 





Softwoods, 1-inch 
stock. 


Hardwoods, 1-inch 
stoclc. 


Yea. 


First 


Average 
pe^'rtEt. 


First 
pe-^rt^et. 


Average 
quality 
per M feet. 


1840 


$20.91 

26. 15 
24.45 
20.43 
41.. 32 
37.70 
39.93 
38.41 
41.51 
34.48 
29.39 
34.06 
41.93 
42.59 
43.50 
45.06 
44.53 
44.92 
42.76 
41.89 
41.53 
42.60 
51.45 
61.58 
131.65 


$10. 50 
10.50 
10.50 
11.00 
11.60 
9.25 
14.28 
14.01 
13.33 
14.00 
17.00 
16.40 
16.55 
21.50 
21.20 
22.06 
24.60 
24.52 
25. 29 

25! 19 
24.68 
26.86 
29.09 
39.90 
44.42 
73.26 






1845 














12.24 
13 57 




1865 






20.94 
24.89 
27.64 
31.62 
31.46 
33.07 
34.52 
39.29 
46.43 
41.97 
49.17 
50.59 
51.44 
53.99 
64.94 
62.94 
54.59 
56.00 

n 

1178.82 








1875 
















Igq5 


$24.76 
27.67 








M1? 


1910 




36.45 






38.61 
38.23 
35.49 
37.64 
38.92 
46 42 




1915 






1918 


1919 


55.54 









1 Figures apply to first three months. 

While a great variety of factors have influenced lumber prices, 
a succession of price levels with sudden transitions correspond- 
ing to important shiftings of th,e field of supply may be readily 
discertied. There has been much price fluctuation in the soft- 

40 



w<iods, but in every instance jirice declines have ultimately been 
regained and new levels have been established. The underly- 
ing cause has been the widening distance between the sawmill 
and the consumer of its product. 

The trend of lumber prices in ea.steru markets since 1840 is 
further illustrated in figure 13, which presents average whole- 
sale values of upper grades of softwoods and hardwoods sepa- 
rately in relation to the average price trend of all com- 
moditie.s. Thv:?e values are expressed in percentages, with 
1S60 prices as the index basis, and on a gold standard through- 
out. Hardwood prices will be discussed in a subsequent 
.section. 

Iletween 1S40 and ISGO average prices of softwood lumber in 
the eastern markets followed quite closely the average price 
of all commodities. The lumber was principally white pine 
from New York, New England, and Penn.sylvania. The average 
value of upper grades in the wholesale trade fluctuated between 
.'i!20 and $.30, centering about $25 per thousand feet, while ma- 
terial of average quality sold fairly uniformly at $10 to $11. 
Transportation costs were about $1 per thousand. About I8.0O 
white pine from the Lake States began to filter through to 
the Atlantic seaboard, and by 1S60 Chicago had replaced Al- 
bany, N. Y., as the leading lumber distributing center in the 
world. The increase in volume of the more distant Lake States 
timber entering the eastern market from then on was accom- 
panied by a price advance in upper grades from $24 in 18.52 
to $30 in IS.^S, and may be accounted for by a growing short- 
age of eastern white pine. 

The Civil War greatly affected the price of lumber, in com- 
mon with that of other commodities, through inflation ; but 
calculated on a gold-standard basis softwood values did not 
increase materially until after 1865. But between 1865 and 
1870 softwoods parted company with general commodity values, 
and with the exception of one brief period have so remained 
until the present time. 

The softwoods reached their new price level in 1866. From 
that year onward lumber prices, except as indicated, remained 
well above the average for all commodities. 

The general level of softwood uppers from 1866 to 1890 
was between $34 and $40 per thousand, and that of the lower 
grades between $14 and $18, an increase over the prewar 
levels of $10 to $15 and of $4 to .$8 per thousand, respectively. 
This was the period during which Lake States white pine was 
entering the eastern market in increasing volume, at increased 
transportation costs of about $5 per thousand. Undoubtedly 
the increasing absorption of timber from the Lake States by 
the Middle Western States, whose development was proceeding 
rapidly, and the growing scarcity of local timber also exerted 
a lifting influence on softwood prices. Large rafts of lumber 
were passing down the Mississippi River to Blemphis, Vicks- 
burg, and even New Orleans. 

The financial depression which began in 1873 caused a tem- 
porary decline of lumber prices in common with all commodi- 
ties. Following 1879 softwood lumber prices advanced steadily 
until 1883, when the upv^-ard trend was checked by an increasing 
inflow to the large eastern markets of yellow pine from the 
forests of Virginia, North Carolina, South Carolina, land 
(Jeorgia, and the rapidly increasing cut in the Lake Statics. 
Suijplies were brought to New York, Philadelphia, Boston, 
Baltimore, and other eastern centers by water transportation. 

During the year 1887, for example, over 200 million feet of 
southern pine was received at New York, an increase of nearly 
30 per cent over 1886. Only a few years before there was but 



TIMBER DEPLETION, PKICES, EXPORTS, AND OWNERSHIP. 



41 




I I I I 



I I § 



r 



si/ssivn/v x:!i7f// 



42 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



sob 



J 



T/F^A^/P OF/iy£/?/lG^/?JETA/l. LOMB^Z? P/7/CES 
/A/ M//VA/£SOT/l /l/VD A/£S/f/IS/r/J //V /?£/./! T/O A/ 

Tos/y/rr/NO so^/?C£s ofli/a^be^ jz//?^z y 

/IND /ll/E/?/IGB M/LL F/?/CES 
(r/f/CE Ca/x'L^£ FO/? COiyA/TFK TF/IDEJ 




rF/jFs 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



43 



one yellow pine yard in New York, and tlio receipts were 
insignificant. 

Tlie interregional compel ition which grew out of the rapid 
expansion of the lumber industry in the Lake States and the 
South during the eighties, together with the continued produc- 
tion in New England and Pennsylvania, was unquestionably the 
dominating factor in crowding softwood lumber prices down- 
ward and holding them at temporarily low but fairly uniform 
points for a decade following 1890. The average value of the 
upper quality lumber centered about $30 per M feet, and that 
of the lower quaUty between $16 and $17 per M feet. During 
this period the lumber-price trend coincided very closely with 
the ups and downs of the all-commodity price average. 

I-!y 1000 the Lake States white pine and the South Atlantic 
yellow pine were waning factors in the New York market. 
This was due not only to the decline in cuts in the.se regions 
but also to the Increasing absorption of lumber by expanding 
markets west of New York. The bulk of the softwood lumber 
in the eastern markets came more and more from the Gulf 
States by rail and water, with increased transportation charges 
totaling $6 to $9 per thousand. This resulted in prices again 
moving steadily upward and the establishment of a neve level. 
The graph reflects between 1900 and 1906 an increasing di- 
vergence of lumber above average commodity prices. 

From 1903 to 1917, the period of greatest decline in the cut 
of the Lake States, the level of softwood prices remained 
fairly uniform. Upper grades averaged from $40 to $45 and 
'lower grades from $24 to $26 per thousand, an advance of 
from $10 to $15 and from $5 to $10, respectively, over the 
previous level. There were, of course, minor fluctuations, and 
since 1907 an abnormal pressure downward on prices arising 
from weak markets and overproduction in most, if not all, of 
the producing regions. This is especially true of the years 1914 
to 1916, a period of great regional competition in all large 
softwood lumber markets. 

In 1917, it Will be noted, the curve for all commodity prices 
advanced sharply beyond softwood lumber prices for the first 
time since 1S6.5, due, of course, to war conditions and the fixing 
of prices by the Government for the more important softwood 
species. 

With the close of the war came the opening of a new period. 
Radical changes had taken place in the general situation. The 
strain of overproduction and intense regional and interregional 
competition was markedly relaxed. The cut of southern pine 
had fallen off some 3J billion feet since 1915, and lumber pro- 
duction in practically all regions excepting the West was below 
normal. With the first development of sharp demand following 
the middle of 1919, therefore, there was demonstrated as never 
before in the history of lumber prices the effect of regional 
reduction of lumber production and its consequent weakening 
of the great leveling influence of interregional competition. 

By March, 1920, average mill prices in both the South and the 
West were more than double the average prices received in 1918 
and more than four times those of 1014. These increases were 
swiftly reflected in the large eastern markets. The average 
value of upper softwood grades was $42 per thousand in 1914, 
$51 in 1918, and $131 a thousand in March. 1920. Similarly, 
lower grade material rose from $25 In 1914 to $40 in 1918 and 
to $73 in 1920. 

Tliese phenomenal jirice advances, although precipitated by a 
variety of factors, unquestionably reflect in part a current 
transition to another lumber price level, the measure of which is 
clouded in present abnormal conditions of trade and finance, 



supply and demand. The new level will be founded on perma- 
nent increases in production costs and the increasing extent to 
which eastijrn markets will have to draw upon western lumber 
at transportation costs of $15 to $20 per thousand feet. 

Softwood wholesale lumber prices since 1840 have therefore 
passed through three main levels in eastern markets and are 
now apparently in the initial stages of the fourth. The first 
level, prior to 1861, was characterized by local supplies and up- 
per grade prices of $20 to $25 per M. The second extended 
from 1865 to about 1900, with prices of from $35 to $40, and 
supplies drawn from the Lake States, and the third level, from 
1900 to 1918. with the Southern States as the main source of 
supply, and with prices (jf $40 to $45. Prices for the fourth 
level are not yet stable. 

MIDDLE WESTERN MARKETS. 

In the markets of the Middle West the effect upon hnnber 
prices of changes in sources of lumber supplies, with their 
accompanying changes in tran.sportation costs, lumber stocks, 
and interregional competition, is even more strikingly shown. 
These Middle Western markets have during the past 25 years 
been dominated by first one species and then another. Each 
change has grown out of cumulative forest exhaustion or 
reductions of lumber cut in main forest regions tributary to 
the markets. 

Prior to 1900 lumber stocks in the retail markets of the Mid- 
dle Western States wei-e largely of white pine from the Lake 
States, distributed at low transportation costs by water and 
short rail hauls. Lumber production of the Lake States was 
at its peak. White pine moved in heavy volume by water to 
Chicago, and in the form of logs down the Mississippi River. 
Practically every river town of importance had one or more saw- 
mills. Dubuque, Davenport, and Rock Island, all in the very 
heart of the consuming region, had, for example, many mills 
from which lumber was distributed locally and by rail to con- 
suming markets. Transportation costs were relatively small, 
lake rates to Chicago, for example, ranging from $1 to $2 per 
thousand feet. 

Following 1900 the sharp decline in the production of north- 
ern pine, due to the exhaustion of the more accessible forests, 
was reflected in a gradual shrinkage of white-pine lumber 
from the stocks of retailers farthest removed from the white- 
pine region. Mills along the Mississippi River, unable longer 
to get steady supplies of logs, began to close down. By 1905 
most of the mills from La Crosse and Winona downward were 
idle. Coincident with these movements wholesale and retail 
lumber prices, even in the southern Minnesota region, began 
to move upward. Wholesale prices of common grades of north- 
ern pine increased $8 to $17 a thousand feet, while the retail 
prices advanced $10 to $15 a thousand feet. This upward 
movement of average retail prices from around $16 in 1895 to 
$25 in 1905, in response to mill prices and the declining soft- 
wood cut in the Lake States, is clearly reflected in figure 14. 

During tlie same period yellow pine from the South was 
moving northward in increasing volume, taking markets which 
northern pine could not supply and exerting through inter- 
regional competition a restraint upon increasing white-pine 
prices. From a production in 1899 of less than 10 billion feet, 
the cut of southern pine increased to more than 16 billion feet 
in 1909, carrying with it a gradual transition of lumber stocks 
from white pine to southern pine throughout a large part of 
the region. The soutliern forests were, however, less accessible 
to the principal markets of the region, and in place of water 
transportation in part ov in whole, rail transportation amount- 



44 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



iiig to fniiii $4 l<> $6.50 per thousand feet was necessary. This 
impo-sed an added cost to lumber and raised the general level 
iif lumber prices. Had not these great southern forests been 
available to meet the rapidly increasing demands of the region 
and to replace the declining cut of the Lalie States, lumber 
prices in the Middle West following 1905 would unquestionably 
liave reached and maintained a materially higher level than 
has actually existed. 

Following 1912 southern yellow pine was the predominant 
species in the retail yards of Missouri, Kansas, Oklahoma, 
Nebraska, Iowa, Indiana, and Illinois. It dominated tlie retail 
trade. In western Kansas and Nebraska and in North and 
South Dakota Douglas fir from the coast and western pine 
Ircmi the Inland Empire had largely replaced white pine, while 
in Wisconsin hemlock formed the principal species in the lum- 
ber yards. Only in Minnesota and immediately contiguous 
localities was white pine the leading species in the retail trade. 
It will be noted from figure 14 that from 1906 to 1917 the 
level of retail lumber prices fluctuated around $30 per thousand 
feet and mill prices around $15. This is explained by the de- 
velopment of further interregional competition from the west- 
ern forests. 

Following 1900 the cut of the Pacific Coast States increased 
rapidly from about 3 billion to more than 7 billion feet in 1910. 
Surplus stocks soon began to move eastward, and Douglas fir 
from the West Coast and western pine from the Inland Em- 
pire became active factors in the northern-pine markets of the 
Dakotas and Minnesota and in the southern-pine markets of 
western Nebraska and Iowa. The period 1908 to 1916 was 
one of periodic business depression and overproduction at the 
mills. In order to move stocks of lumber in the South and in 
the West, prices were often set at cost of production or less. 
Southern pine and Douglas fir met in keen competition in the 
Prairie States. This expanding movement in yellow pine and 
Douglas fir competing for markets naturally exerted a leveling 
pressure upon lumber prices. It was a buyers' market. Buyers 
whipsawed the price of one species against the other, and 
thereby exerted further pressure downward on both wholesale 
and retail prices. 

From the standpoint of the public, or the lumber consumer, the 
situation is illustrative of the great economic advantage of 
having large available fore.sts in different producing regions. 
When the supply of lumber from the Lake States first began 
to decline radical price advances were unquestionably prevented 
by the inflow of a great volume of lumber from the South. As 
the southern pine lumber established itself in the markets of 
the Middle West, tlie exhaustion of timber in the Lake States 
leaclied a point where northern pine and hemlock ceased to be- 
come effective competitive factors, except in very limited re- 
gions, but further advances in lumber prices were checked by 
the great inflow of lum-ber from the West. 

The increasing volume of western lumber in the middle west- 
ern markets obviously increased the freight rates liorne by lum- 
ber. That these increases are not reflected by figure 14 is due 
to the fact that during the period 1910 to 1916 they were largely 
absorbed by the mills In lieu of profits in order to move surplus 
stock. These conditions are shown graphically in figure 15. 
They therefore have acted as springs, exerting pressiire upward 
and intensifying the responsiveness of prices to any release of 
lirossui'e from above. In the retail trade of southern Minnesota, 
for example, the average transportation cost borne by lumber 
in 1905 amounted to abcmt $3 per 1,000 feet. In 1915 it had 
increased to $S..50, and in 1919 to practically $12 per l.O^W feot. 



Normal markets for lumber in the Middle West largely dis- 
appeared during tlie war. The needs of the Nation in prose- 
cuting the war, however, eventually absorbed available lumber 
stocks. There was little active demand for lumber, but poten- 
tial demands steadily accumulated. In the meantime lumber 
production in almost all regions declined. Restrictions on lum- 
ber were lifted following the armistice, and the great pent-up 
demand for lumber was released into normal channels of trade. 
Prewar conditions of business depression and overproduction 
at the lumber mills had passed. There developed, indeed, a 
striking reversal of those conditions. Lumber was needed in 
great volume to supply the shortage of homes and other build- 
ings. Wood-using industries were short of lumber to resume 
business on a prewar .scale. Industries began to expand on the 
abnormal increase of credit growing out of war financing. 
Production of southern pine lumber had passed its peak. The 
South was prosperous and In need of lumber. It absorbed the 
cut of southern mills at high prices in greater volume than ever 
before, while eastern markets likewise drew more lieavily upon 
the South. 

As a result of the foregoing conditions, the former dominating 
and far-reaching competition of yellow pine was much con- 
tracted, and the great markets of the Middle West were left 
primarily dependent upon timber from the Pacific coast and the 
Inland Empire. The greatly reduced cut of the Lake States' 
forests was wholly ineffective as a competitive factor in exerting 
a leveling influence upon prices, and the upward pressure of 
increased transportation costs and lean profit years prior to 
the war was set free to act. Within a year or 18 months 
Douglas fir lieiame the principal species throughout the greater 
portion of the .Aliddle West. To-day it forms 80 to 90 per cent 
of the relail stocks in Minneapolis, which has always been a 
great white-pine market. It is found in Chicago in greater vol- 
ume than any other species. In Kansas City, which is on the 
very edge of the southern pine di.strict, it forms more than 
50 per cent of the lumber stocks. 

In the foregoing conditions may be found tlie underlying 
causes for the chaotic price situation which developed in these 
middle western markets during the latter part of 1919 and the 
first months of 1920. Beginning with June, 1919, prices moved 
steadily upward. It was the beginning of an intensified sellers' 
market. AVholesale and retail lumber prices reached tbe highest 
point in the history of the industry. As shown by figure 19, 
the average sales values of retail stocks in country districts in 
March were around $85 per 1,000 feet, while average wholesale 
mill prices ranged from $45 to $60. The trade was plunged 
Into confusion. Buyers needed lumber and were willing to bid 
for it. For several months prior to March, 1920, lumber prac- 
tically lost uniformity of price in many markets. Quotations in 
the same market varied from $2 to as much as $50 per thousand 
feet on the same grade. The tables of 1914 and 1915 were 
turned. Sellers whipsawed buyer against buyer. Lumber was 
auctioned to the highest bidder, with prices continually going 
higher. On some of the upper grades, especially among the 
hardwoods, sellers refused to make quotations or to grant op- 
tions on expected material. Through the use of the transit-car 
privilege dealers often held cars for big prices, paying demur- 
rage charges and gambling on further price advancements. 
Instances were cited where transit cars changed hands six and 
eight times standing on the sidetracks. 

The movement of lumber prices and lumber stocks in the 
Middle West reflect what occurred in varying degree in prac- 
tically all other large consuming markets dependent upon Uim- 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



45 



LuMBCfi /A' Couf'd TRY Retail. Tfi 






ii ii i i l 



M M M I i I JJ 





















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Rf 






O^Tff -P«/C 


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Otmeu EssEfjTiAL. rACTOKS or Cost 






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fLLUSTRATlOf^ or Cf^AMGtNO Sp£C/£S W /?£TAfl^ LuMB£fi SrOCt^S 

Country Yards //v MfNA/£5orA 

1 E^i2Sg Per Cenr yV^SC /Yem/ac A i 

I UIUUUIU Per Csnr So YeUo^ P>n9 



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Bct^is - Tbf'Cif Fsetcigc -^a/es 

.Vebraska 61 MW,t)n Ft 
Mii^riesofo ^'.sM.I/ior Ft 




46 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



bor from distant regions. As in the East, the effects of forest 
depletion are clearly discernible. Because of interregional com- 
petition these effects are manifested in the form of successive 
price levels, the first prior to 1900, with retail price averaging 
around .$16 and the Lake States as the source of .supplies; after 
a period of transition a second, beginning about 1906 and last- 
ing through 1916, with prices centering around $30 for southern 
lumber. The rapid advance and chaotic prices of recent months 
are symptomatic of a transition to a third and permanently 
higher level than that which has prevailed during the period in 
which southern pine has dominated the situation. 

It is true that lumber prices. were bound to rise with pro- 
ducing costs and in common with other commodities. It is 
true also that their sudden skyrocketing was unquestionably 
precipitated by a combination of many conditions, including 
mifavorable logging weather in the South, reduced stocks at 
the mills, car shortage, etc. The relation of producing and 
distributing costs to prices will be discussed in a subsequent 
section and the underlying cause of the extraordinary and 
miprcedented price movement since the armistice is not found 
in that relation. It is found in the weakening of inter- 
regional competition brought about by a temporary shortage 
of lumber, occasioned primarily by curtailed production re- 
sulting from conditions growing out of and following the war. 
Cumulative forest depletion in regions formerly supplying the 
big lumber markets of the country has been an important con- 
tributing factor. The great balance wheel of interregional 
competition is unable to function effectively and without 
interruption as the regional sources of timber supply are 
exhausted and abnormal conditions, such as have characterized 
the ijostwar period, are thus free to play a larger part in 
violent and extreme changes in market conditions. 

Had the Middle West been able to draw on ample forests of 
northern as well as of southern pine to meet the demand of 
an enlarged and insistent market the respon.se would have 
been far easier and the situation far less acute. Had it not 
lieen for the fact that timber from the far West was partially 
available to lessen the strain of a demand far beyond the 
supply the pressure would have been still more extreme. It 
is safe to say that Douglas fir will not permanently lose the 
place which it has now obtained in the markets of the East 
and the Middle West, but on the contrary, as the output of 
.southern pine declines it will more and more dominate those 
markets. The freight tolls upon it are being incorporated in 
the new price level. And the crisis which has brought about 
its extensive introduction serves to illustrate what may be 
expected with increasing frequency and intensity as forest 
depletion proceeds and no steps are taken to make cut-over 
lands productive. 

EASTERN HARDWOOD MARKETS. 

Wholesale prices in the eastern markets for upper grade hard- 
woods are shown in figure 13 between 1855 and 1920, and also 
with material of average quality for somewhat shorter periods 
in Table 11. The hardwood price curve follows closely that for 
all conunodities until 1860, since when they have been separat- 
ing gradually except for a short period following the Civil War. 

The curve of hardwood prices in figure 13 indicates a much 
sharper and more consistent increase in hardwood than in soft- 
wood prices. The leveling effect of interregional competition is 
less apparent, due in part to the more general distribution of 



hardwood forests and the relatively smaller consumption of 
hai-dwood lumber. Four rather distinct price levels are ap- 
parent, however. Between 1865 and 1875 there was a rapid rise 
to almost double the prewar level, followed by a steady increase 
until between 1900 and 1905, 'when another abrupt rise marked 
a new general level of hardwood prices. Again in 1918 a still 
higher level is indicated by an increase of more than .$10 a 
thousand over 1917, and during 1919 and the early months of 
1920 a very much greater increase, which carried the average 
price to almost $125 in excess of that shown for 1917. 

In the early days, when transportation sy.stems in the United 
States were undeveloped, commerce in hardwood lumber was 
limited, owing to the difficulty of rafting. Its consumption was 
mainly by local markets immediately tributary to the source of 
supply. Between 1850 and 1860 hardwoods were cut near the 
consuming centers. Prices were low and the quantity consumed 
was comparatively small. First-quality white oak sold in the 
eastern markets in 1855 for $10 per 1,000 feet wholesale, poplar 
for $11.50, and ash for $10.50. 

Following the Civil War the counnerce in hardwood lumber 
expanded rapidly with the development of railroads. By 1870 
hardwood lumber from Ohio and Indiana was being shipped by 
rail to the eastern markets, and the local cut w^as no longer 
sufficient to meet their needs. Prices had risen to about $26 
per thousand for oak and $25 for ash and poplar. With the 
development of the wood-using industries and the increasing 
use of hardwoods for special purposes, the industry began ex- 
panding into the highlands of West Virginia and the southern 
Appalachian Blountains with increased logging and transporta- 
tion costs. By 1890 the price of ash and oak had increased to 
S35 and poplar to $30 per thousand, and in the 10 years follow- 
ing 1890 oak increased to $43, ash to $45, and poplar to $36 per 
thousand. 

Between 1900 and 1909 the total hardwood cut in the United 
States gradually increased. During the decade following 1910, 
however, the hardvv-ood cut of the country steadily declined 
from ten and a half to between 6 and 7 billion feet in 1918. 
This decline is reflected in all hardwood regions excepting the 
lower Jllssissippi Valley, which has increased from a produc- 
tion slightly less than 800 million in 1900 to almost a billion 
and a half feet in 1917. 

The growing dependency of wood-using industries and other 
hardwood consumers upon the hardwood cut from the lower 
Mississippi Valley serves to emphasize the growing exhaustion 
of the hardwood forests in the central, eastern, and northern 
hardwood regions. The South is the last large hardwood reserve, 
and its reduced cut during the past two years, because of bad 
flood conditions, labor shortage, and other temporary factors 
which have curtailed both log and lumber output has been a large 
factor in bringing about an acute shortage of hardwood lumber 
in practically all markets. 

The general condition of the hardwood industry following 
the war became even more un.settled than that of the softwood 
lumber industry. Hardwood lumber used for war purposes was 
confined largely to oak, hickory, walnut, yellow poplar, bass- 
wood, and ash, the stocks of which were well exhausted by the 
close of the war. The production of other hardwood species 
was curtailed on account of Government restrictions. The wood- 
using industries were short of dry stock to meet the demand 
for furniture, finish for homes, and other hardwood products. 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



47 



Tlie result was tliat hardwood lumber was bid up to unprece- 
ilontod prices. The market became extremely erratic and un- 
stable. Several species such as ash practically disappeared 
from the market. Quotations often did not hold good over- 
night. It was not uncommon for cars of hardwood lumber to 
net the ow-ners profits of $50 to $100 and over per 1,000 feet. 
As an example, a jobber who had bought a car of quarter-sawed 
oak from a small mill operator for less than $100 per thou- 
.land immediately sold it for $400 per 1,000 feet. 

Wholesale and retail prices in 1920 of a number of the more 
important hardwoods in relation to prices prevailing in previous 
years are shown in Table 12. The growing scarcity and high 
prices of oak are probably of greatest concern, because it is 
used by such a . great variety of industries and consumers. 
The cut of oak reached its peak' with the decade between 1S99 
and 1909. Foi- the two years mentioned the cut was identical 
and amounted to nearly 4i billion feet. Since 1909 there has 
been a general falling off in production, and in 1917 the cut 
had dropped to a total of 2 billion and was only 44 per cent 
of the cut in 1909. 

The lower Mississippi Valley holds the last large reserves of 
oak timber in the United States. The cut in these States de- 
creased from about 715 million feet in 1909 to about 470 million 
feet in 1917. In 1913 the wholesale price of F A S quartered 
white oak, used generally by the furniture and musical instru- 
ment manufacturers, was about $80 per thousand. In February, 
1920, it had risen to about $300, and was difficult to procure at 
that price. To manufacture quartered oak first quality, large 
sized, straight-grained logs are required, wlrtch are obtained only 
from old growth or virgin timber. Quality depletion of timber 
is important in this case. 

Table 12. — Wholesale and retail prices of hardwood lumber at 
various points throughout the United States. 

WHOLESALE PRICES (DOLLARS PER 1,000 FEET). 



OAK. 

Firsts and seconds 1-inch plain boards: 

Philadelphia 

New York City 

Pittsburgh 

Cincinnati 

No. 2 common 1-inch plain boards: 

Pliiladelphin 



-inch boards: 

Philadelphia 

New York City 

Cincinnati 



YELLOW POPLAR. 

Firsts and seconds 1-inch boards: 

Cincinnati 

Philadelphia 

So. 2 common 1-inch boards: 

Philadelphia 

Pittsburgh 



Cincinnati.. 



HAfiOGANT. 

Firsts and seconds Mexican and Honduran 
mahogany 1-inch boards: 
New York City 



'56.00 
55.00 
74.00 



82.50 
75.00 
75.00 



127.00 
95.00 
85.00 



310.00 
300.00 
300.00 



T.\ni.E 12.— Wholesale and retail prices of hardioood lumber at 

r-arious points throughout the United $!tafes— Continued. 

RETAIL PRICES (DOLLARS PER 1,000 FEET). 





February, 
1914. 


February, 
1919. 


February, 
1920. 


Firsts and seconds 1-inch plain boards: 

Philadelphia ... 1 








88.00 
'83.00 
72.50 


i:i2. 00 
100. 00 
100.00 


252.50 
260.00 
265.00 


Pittsbiu-gh 

Cmcinnati 

No. 2 common 1-inch plain boards: 


New York City [[.[w::]:: 


5S.00 
45.00 
31.00 

115.00 
'98.00 
100. 00 




Pittsburgh 

Firsts and seconds 1-inch quartered boards: 

New York City 

Pittsburgh 

Cincinnati 

Firsts nnH qfennHs l-innh hnarrt^- 


■54.00 
46.50 

192.00 
126. 00 
115.00 


150.00 
116.00 

400.00 
385.00 
385.00 



Cincinnati 

Nt . 2 common 1-inch boards: 

Philadelphia 


97.50 


105.00 


«« 


NewYorkcity :...::::: 

Cincinnati ;.... 


45.00 
36.00 


60.00 
37.50 


140.00 
105.00 


YELLOW POPLAR. 








Firsts and seconds 1-uich boards: 
Cincinnati 


83.00 


106.50 


253.00 




No. 2 common 1-ineh boards: 

Philadelphia 

Pittsburgh 

Cincinnati 


"'""''36.'o6' 


56.' o6" 

39.00 


85.'o6 

100.00 


n\1?VoXS?^^!°*.!>.'!!°.'.r^.l^ 




Firsts and seconds Mexican and Honduran 


175.00 


330,00 









' February, 1913. 

Ked gum, which 20 years ago was considered a weed tree 
and little cut for lumber, commands a wholesale price of $200 
per thousand for FAS figured and $180 for F A S plain. 
Plain oak flooring in 1913 in Ohio cities retailed for about $75 
per 1,000 feet; In March, 1920, the same material brought 
$300 per 1,000 feet. White ash trim P A S in 1913 retailed 
lor $72 per 1,000 feet To-day it is >ery diflicult to procure 
and quotations are not generally available; however, sales' 
have been made at $205 and over per 1,000 feet. Maple floor- 
ing in 1913 retailed for .fGO and in March, 1920, for .$240. 
Yellow poplar F A S in 1913 retailed for $70 and in February. 
1920, for $225. 

Wholesale prices for hardwoods in the eastern markets are 
therefore characterized by more continuously rising prices and 
much less pronounced price levels than for softwoods. This is 
the logical result of the distribution of hardwoods, the larger 
bodies of which merge into each other and are less distinct than 
the principal softwood regions. Thecenterof hardwood produc- 
tion has therefore moved gradually away from the center of con- 
.-Tamption. The $10 wholesale price for first quality white oak 
of 1855 had, by the early months of 1920, reached $230, and tie 
prices of other species had increased |)roportionately. Without 
minimizing other factors that have affected prices, the effect of 
depletion is not less clear or pronounced than in the case of the 
softwoods. 

PLENTIFUL AND DEPLETED SPECIES. 

The foregoing increa.ses illustrate the effect of growing 
scarcity and regional forest exhaustion upon tlie price move- 
ments of species of general and special use. This is further 
brought out graphically in figure 16, which shows the price 
iri'iid ol walnut, a species of limited quantity and special use, 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



S260^ 



TREND OF AVERAGE PRICES OF UPPER 
GRADES or WALNUT AND EASTERN WHITE 
PINE, IN RELATION TO UPPER GRADES OF 
SOUTHERN YELLOW PINE. 

IVHOLES/JLE P/f/CES P£/f M. FEET /N 
E/ISTEffN MA/?/<ETS 




134-0 184-5 leSO 



1860 1365 1870 1675 J880 1885 
-XEARS 



1900 1905 1310 I3IS 1320 



TIMBER PEPLETIOlSr, PRICES, EXPORTS, AND OWNERSHIP. 



49 



and of the upper grades of white pine, a species formerly avail 
able in large quantities and of general utility, but now near 
ing exhaustion, in relation to upper grades of southern pine, 
a wood of present large-quantity production. The curve for 
walnut, it will be noted, shows a rise in price from $25 in 1865 
to $112 in 1905, without a single drop. This was undoubtedly 
due to the comparatively small original stand of walnut. At 
present lirms handling walnut in quantity have scouts in the 
lield searching out and buying single trees to supply their needs. 
In contrast to walnut prices, the prices of white pine were 
only slightly higher in 1895 than in 1866. During this period 
white pine was the general utility wood. It was available in 
large quantities in pure stands first in southern New England, 
then in New York and Pennsylvania, and later in the Lake 
States. To-day it is largely a specialty wood. The transition 
from a general utility to a specialty wood following 1900 is 
strikingly illustrated by the marked divergence of the white- 
pine curve from the southern-pine curve. The difference in 
price in 1900 of approximately $20 per thousand had reached 
$70 in 1915 and $130 in 1920. 



Retail prices collected indicate that in normal times and 
much more during periods of shortage and extreme prices, 
such as the present communities close to large lumber-producing 
regions, beuetit very materially in lumber prices. Retail lum- 
ber sales in producing regions of the South and the West are 
often made at rates which check closely with wholesale prices 
in the respective regions. This is an advantage which formerly 
forested regions, such as the Lake States, Pennsylvania, New 
York, and New England have now lost. Lumber dealers in 
producing territories are able to handle lumber on a smaller 
margin than retailers at distant points, primarily because 
they are near the source of supply and are not required to carry 
large stocks or to buy lumber far in advance in anticipation 
of delayed shipments and traffic breakdowns. Present differ- 
ences, however, far exceed prewar margins. 

Furthermore, many mills retail lumber locally at whole- 
sale prices. Instances were found, in fact, where special prices 
below the going wholesale price were made by mills in order 
to stimulate local building and community development. Red- 
wood bevel siding sold in February, 1920, dt a producing city 
in California for $40.90 wholesale and $43 retail. During the 
same month in Washington, D. C, and at Dayton, Ohio, the 
quoted prices on the same material varied from $110 to $130. 
The freight rate from California to these points was approxi- 
mately $8.50. 

The three tables which follow indicate retail selling prices 
in towns and cities in lumber-producing regions in contrast 
to prices prevailing in markets far removed from forest 
regions. In some instances, sale prices and price quotations 
from difterent dealers varied considerably, and in these cases 
an average of the prices obtained is used. 

Table IS.— Comparison of retail prices per thousand feet of 
North Carolina pine lumber at points in producing and in con- 
suming regions. 



Table 14. — Comparison of retail prices of southern yellow pine 
lumber in South with prices in consuming region. 





February, 1920. 


Southern yellow pine. 


Points to producing 


Average 

sellin;; 


Pomts in TOnsuuiiUK 


price 
■'fSt'" 




Nfobile Ala 


SI 15. 00 
11.5.00 
110.00 
110.00 
110.00 
54.00 
50.60 
55.00 
53.00 
55.00 
56.00 
51,60 
61.50 
57.00 
60.00 
110.00 

i:o.oo 

114.00 
112.50 
115.00 


Kansas City. Mo... 

lin.oln, Nebr 

Country town.Kans. 

navton. rhio 

Pittsburh, Pa 

K"ansasCitv. Mo.... 

Chiia-'O. Ill 

Country town, Kans. 


$133.55 

rs.oo 

140.00 
150.00 
142.00 
66.45 


FloormB,lbv4ta'-hes 
B and bettor, flat 


Montcomerv. Ala... 

-Aferidian, Miss 

Bogalusa, La 

Pensacola. Fla 




Dimensions, 2 bv 4 
Ifer^mnfon*. 


Monteomerv. Ala... 

Meridian. Miss 

Bo-ahisa, La 

I'ensa.ola. Fla 










Kansas Citv. Mo.... 
Country to\vn, Kans. 

Chi. a™, III 

Dayton, Ohio 

Pittsburih, Pa 

Kansas City, Mo.... 

?^^S: &:;;::■• 

Country town, Kans. 
Dayton, Ohio 


60.80 
80.00 
80.00 
139.40 
135.00 
135.00 
145.00 
175.00 


Common boards. 1 hv 
8 inches, No. 2, S2S. 


Montcomerv. Ala... 

Meridian, Miss 

Roualusa. La 

Pen.sa.:ola. Fla 


Finish. B and better, 
1 by 6 inches, 8 feet.. 


Monteomerv, Ala... 

Meridian. Miss 

Pensarola. Fla 

Bogalusa. La 



The freifht rates per 1,000 feet from sc 
City. Mo., Linioln, Nebr., and to Chici 
amounted to approximately 87.25, S7.90, 3 



ithem yellow pme mill points to Kansas 
CO, 111., Davton, Ohio, Pittsburgh, Pa.. 
i.50, and $7.50, respectively. 



Table 15. — Comparison of retail prices of Douglas fir 
Coast with prices in consuming region. 



Flooring, No. 2 clear, 
vertical grain, 1 by 
4 inches. 



Common boards. No. 
1, 1 by 8 inches, 16 
feet, SIS. 





February, 1914. 


February, 1919. 


February, 1920. 


North Carolina pine. 


Wil- 

ming- 

N°C. 


City. 


Wil- 
minc 

n"c. 


City. 


Wil- 

ming. 


New 
C^i?^'' 


Flooring, 13/16 by 2J Inches, No. 


$25.00 
27.50 
18.00 


$38.00 
45.00 
27.50 


$45.00 
50.50 
32.00 


$62.50 
64.50 
55.00 


$98.50 
101.00 
46.00 




Partition, 7/16 inch, all widths, 
No 2 and better 


150.00 


Ceiling, 7/16 inch, all widths. No 









I selling 
! price 
per M 



Portland, Oreg.. 

Eugene, Oreg j 48. i 

BelUngham, Wash.. 39. i 



{Portland, Oreg.. 
Eugene, Oreg... 
BelUngham, Wa 



T incoln, Nebr 

Country town, Kans. 

Kansas City, Mo 

Chicago, 111 

Minneapolis. Minn . . 

Pittsburgh, Pa 

New York City 

^ incoln. Nebr 

Country town Kans. 
Kansas City, Mo 



Aver- 
age 
selling 
price 
per M 
feet. 

$112 50 
125 00 
128.35 



62 50 



Kansas City, 
Chicago, 111. 

Minneapolis, Minn . . I 65. 00 

lincoln, Nebr 62.50 

Country town. Kans. 67.50 

Kansas Citv, Mo j 66 45 

Chicago, 111 65.65 

Minneapolis, Minn . . 63. 00 



The freight 
and Kansas C 
City amounted ti 
respectively. 



y)er 1.000 feet from the West Coast to Lincoln, Nebr., 
o., Minneapolis. Chicago, " ' 
pproximately $13.75. $1 



Differences shown in the foregoing tables are in most cases 
very striking. No. 2 and better flooring of North Carolina pine, 
for example, was retailing at around $150 in New York in 
February, 1920, but was retailing in Wilmington, N. C, at about 
$100 per 1,000 feet, although the freight rate to New York 
amounts to only $4 or $5 a thousand. Similarly, No. 2 southern 
pine common boards 1 by 8 inches were being bought in south- 
ern cities at from $.50 to $G0 a tliousand feet, but were costing 
$S0 a thousand in Dayton, Ohio, and Pittsburgh, Pa., despite 
freight rates equivalent to only about $6.50 and $7.50, respec- 
tively. In the case of Pacific coast Douglas fir flooring No. 2. 
clear vertical grain, 1 by 4 inches, average retail prices were a.« 
low as $85 in some western cities and as high as $140 in some 
eastern, with freight rates of $20 or less. In some cases the 
dilference between present retail prices in producing regions 
plus freight and retail prices in consuming regions exceeds the 
total prewar prices in the consuming region. 

Twenty years ago sawmills in Minneapolis were cutting more 
than 500 million feet of lumber annually. As tributary forests 
became exhausted these mills were forced one by one to close 
down. The last remaining mill closed a year ago, and one of 
the larger cities of the country, as well as the ricli agricultural 



50 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



region surrounding it, is to-day forced to obtain from 80 to 90 
per cent of tlie lumber from Pacific coast forests some 2,00(i 
miles distant. Douglas fir, common dimension, 2 by 4. fror.i 
western Oregon and Wasliington, for example, cost at retail ir 
Jlinneapolis in February, 1920, $60 to $65, whereas in 1900 1 
by 4 dimension of white pine could be purchased for $15 to $20. 
The growing scarcity of white pine has constantly tended to en- 
hance its value. During January and February of this year it 
is said that the relatively few remaining northern pine mills 
could obtain almost any price desired for their lumber cut. 
Price lists recently issued by two groups of mills, for example, 
(iuoted prices varying $15 or more on the same grades. Figure 
17 reflects wholesale prices of three grades of northern pine in 
Minneapolis at intervals of five years from 1900. 

Even in normal times lumber purchasers in nonforested and 
ilepleted regions are at a distinct disadvantage over purchaser.*; 
in regions of lumber production. This disadvantage becomes 
iiuich more pronounced in times of scarcity and unsettled con- 
ditions such as the present, when the excess In retail prices, 
deducting all transportation costs, may even exceed the total 
price of the same grades under normal conditions. 

PRICES AND COSTS OF PRODUCTION AND 
DISTRIBUTION. 

Figures indicative of the increasing costs which have en- 
tered into lumber manufacture and distribution will be given 
separately for (1) production, (2) transportation, and (3) re- 
tailing. Along with these figures showing the increase in costs 
are given also figures as to increases in selling prices and the 
ratio of transportation charges to retail prices. 

MILL PRICES AND PRODUCTION COSTS. 

Figure 18 shows in graph (a) the trend of average selling 
prices of Douglas fir, southern pine, and Inland Empire species, 
separately by years, for periods from 1905 to 1919; graph (6) 
these prices expressed graphically on a percentage basis, with 
1914 as the index year; graph (c) the average mill price re- 
ceived by a typical Douglas fir mill plotted in relation to operat- 
ing cost. 

Pacific coast. — Table 16 shows mill prices for Douglas fir 
lumber produced on the Pacific coast in Oregon and Washington 
Incorporated in graphs (a) and (c). and adds the average 
selling prices in Decembei-, 1919, and January and February, 
1920, as determined from index grades of a large volume of 
lumber sold by a number of mills. 

Table 16. — Average price per thousand feet lumber tally. 



Years. 


Number 
of mills. 


^f 




S11.30 
11.44 
10. .IB 
9.80 
11.63 
16.93 
21.21 
25. S« 
37.58 
42.04 
45.72 




1913 


16 Ot 


■'114 


13 '6 






1918 


15.55 




11 88 


















.March," 1920 (orders) 





The average prices shown above for a number of mills do not 
Include underweights and sales of special stock and by-products, 
which would tend to increase them slightly. The two sets of 
prices as given above are believed to be representative of high 
and low average mill prices. 

Compilations prepared by the West Coast Lumbermen's Asso- 
ciation show that manufacturers west of the Cascades received 
In 1919 an average of $25.70 per 1,000 feet for all species. The 
association's figures are based upon data fronj 50 mills, and the 
average prices received by the different mills, including returns 
from lath, wood, and sawdust, range from $20.50 to $35.50, a 
variation of $15. It is fair to assume, therefore, that the 
average mill price of Douglas fir during 1919 was between $25 
and $30 per 1,000 feet. 



The average mill prices given for the months of December, 
3 919, and January and March, 1920. are based on sales reported 
to the W>st Coast Lumbermen's Association, and represents a 
large volume of business. It will be noted that the average 
price for March (based on Orders taken) amounted to over 
four and a half times the average price received in 1915, and is 
$20 higher than the average price shown for 1919. 

A comparison of 1919 production costs in this region with 
costs In 1913, 1914, and 1915 indicates that the cost of produc- 
ing lumber has a little more than doubled. On the basis of 
information collected and compiled by an accountant employed 
by the West Coast Lumbermen's Association, the average cost 
of logging Douglas fir by manufacturers In Oregon and Wash- 
ington during 1919 amounted to $10.S9, this figure being an 
average of an output of about 1 billion feet. Costs of manu- 
facture show similar Increases. In 1915 the average manu- 
facturing costs of 30 mills in Oregon and Washington was $5.53 
per 1,000 feet, while in 1919 the average manufacturing cost, 
as determined by the West Coast Lumbermen's Association, 
amounted to .$10.21 per 1,000 feet, or, with shipping and selling 
included, $11.83. 



Jen 1900 
Feb 190 i 
Jan 1910 
Jon 1915 
Fc6/9Z0 


__4___L^ 


■ 


No Z COMMOfJ DlM£N5lON 

Zx^ 16 5ISIE 




^B 


















"TT" 


■", 


Jon 1900 
Feb 1905 
Jan 1910 
Jan 19/5 
Feb 1920 

Dollar:! 




1 


No 'i Common Boarcs 
AlVOiALSIS 
















rrf 




; 




h" 




Jan 1900 
Feb 1905 
Jan 1915 
Janl9Z0 

Dol/ar:, . 


1^ 




No /Common Soakds 
/./0-1I5Z5 




— ■ 














^ 1 \ 


, 


'rm 


^ 



FIG. 17.- — Wholesale prices at Minneapolis of northern pine lumber. 

The total cost of producing lumber in the region west of the 
Cascades, in Washington and Oregon, in 1919, based on informa- 
tion collected and compiled" by the West Coast Lumbermen's 
Association, but presented below in a little different form, and 
compared with other data showing average costs and mill price 
for 1913, Is as follows : 





Lumber tally per 
1,000 (eet. 




Associa- 
tion data, 
1919. 


Pervice 
data, 
1913. 




S9.90 

10.21 

.90 




Maniifacturin" 


5.25 




.40 










Total f. 0. b. mill 


2r 79 
2.36 


10.70 
1 50 








21. 15 

25. S3 




Average selling price 


12.50 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



51 




/305 /906 /307 /908 J309 /9IO /9/I 



/3J3 19/4 I9J5 



/9I7 /3J8 



DOUGLAS r/R-MAR-/9aO- 33Z7o — • 
YBLLOW PINE MAR.I920-353y,-^ 



PEFIC^NTAGES OF /NCFfEASE AND DECREASE /N THE \ 
AVERAGE M/LL PR/CE5 PER M FEET I 

FOR SOUTHERN rELLOiV P/NE. DOUGLAS F/R. AND /NLAND EMPIRE SOFTWOODS 




/90S /906 /S07 /903 /909 /9/0 /S// /9/e /3/3 /3/-^ /9/S /9/6 /9/7 /9I8 19/9 



K30 



TREHO OF M/LL PEf/C£S /4/VD ESSENTML COST r/iCTOF?3 
y^T y^ TyP'/Cy^L DOUGLAS F/Pf Cy^FfOO AiNDF?Al/L M/LL 




52 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



The association's compilation sliows that it cost $24.95 per 
1,000 feet to produce lumber in 1919, as against $24.15 shown 
by the above figures. The difference is due to the fact that the 
figures of the association include log-buying mills. Average 
costs at individual mills range from about $18 to $32 per 1,000 
feet, with a figure close to $25 representing the average for 
1919. Production costs of April, 1920, are estimated to average 
at least $26 per 1,000 feet. As previously indicated selling 
prices on the basis of orders averaged $45.72 for March, 1920. 

The increasing cost of producing lumber is due to a variety 
of factors, among which may be mentioned increases in wages 
in both woods and mill: reduction in hours of labor; more in- 
accessible stumpage; decrease in efliciency of workmen; loss 
in feeding men; higher stumpage costs; increasing cost for 
equipment, supplies, and repairs ; increases in freight and tow- 
ing rates on logs ; and higher cost of fire insurance. 

Inland Bmptre.— Throughout the Inland Empire mill prices 
and logging and manufacturing costs for 1919 show similar 
large increases over prewar years. The trend of average mill 
prices is shown in figure 18, graph (a), and these average 
yearly prices, together with costs and profits, are stated specifi- 
cally in the table below. The figures used are based on data 
collected from a large number of mills throughout the Inland 
Empire. 

During the years immediately preceding the war the mills 
in the region show small net profits. During the six-year 
period ending 1914 the largest and best-managed companies in 
the region, representing 59 per cent of the cut in the Inland 
Empire, earned only 1.06 per cent on all capital in use, bor- 
rowed or unborrowed, exclusive of their profit.s on stumpage 
investments. Beginning with the year 1917 much more sub- 
stantial profits are shown. 

Production costs and average mill prices in 1914 and 1919 
were : 



1919 



In the table below is given a statement of production costs 
and average mill prices, with profit and loss, for operations in 
the region. 

Table 17. — Costs of production and average selling prices of 
softwood lumber per M feet cut in the Inland Empire. 



Production 

costs, 
including 
stumpDge. 



Average 
selling 
price. 



14.19 


J14.62 


14.78 


15.38 


15.68 


15.50 


1.1.1S 


13.96 




15.07 


14.54 


14.81 


14.20 


14.12 


16.90 


14.56 


19.70 


22.20 



luately 3.50 per cent. The average mill prices from 1914 to date 
are Indicatetl below : 



The figures given for 1919 do not reflect prices during the 
latter months of the year, when they were much in excess of 
the average of $30.92. They have since continued at higher 
points. 

Soutliem pine States.— The trend of average mill prices for 
southern yellow pine is shown in graph (a), figure 18. As 
with Dou.g!as fir, 1915 was the year of lowest prices. Taking 
1014 as a more nearly average prewar year, the selling price 
was $13.CS, as against $33.94 for 1919, an increase of approsi- 



{rcrage 
Year : 


selling price f. o. 


6. mill 


per 


1,000 feet.- 










13.02 


1916 








16.12 










21.13 












1919 








33.94 


SeptembHr 1919 


















44.60 


November 1919 








42.06 










45. 41 


.Tanuarv 1920 








52.21 










57.94 


Maich, 1920 








61.60 



Tlu» price for the years 1914 to 1919 are based on reports made 
to the Forest Service from operators throughout the southern 
pine belt. Those for the years prec«ling 1914, as shown in 
graph (o), were taken from the books of manufacturers without 
attempt at auditing. Tlie monthly prices given for 1919 and 
1920 were obtained from the reports of a lumbermen's organiza- 
tion and were based on a weighted average of all sales reported, 
exclusive of exports. 

In 1914 the average cost of production for 108 southern pine 
operations was determined as $12.79, with stumpage at $2.36 
carried forward from 1905 at 1 per cent to cover taxes and 
current expenditures. With stumpage included at the prices 
tlien cui'rent, the average cost of production was determined as 
$14.-54. In contrast with these production costs the following 
figures for the latter part of 1919 and the first two months of 
1920 are taken from cost statements of the Southern Pine As- 
sociation : 



Month. 


Stumpage. 


Avorace 
operating 


Average 
sellini 
price. 


September 1919 


$5.24 
5.31 
5.41 
5.52 
5.44 


$26.56 
27.04 
31.75 
29.14 
28.54 


139.37 


October 1919 


44.60 










February 1920 


57.94 







It will be noted that in 1914 the margin between selling price 
and production cost f. o. b. mill was 89 cents per thousand 
feet, with stumpage figured at the 1905 cost plus carrying 
charges, and that with stumpage carried at its current value 
a net loss of 86 cents per thousand was incurred. In the latter 
months of 1919 and the first two months of 1920 the margin of 
net profit ranged from $13 to $29 per thousand feet, exclusive 
of whatever profit may have been made on stumpage. 

In the six or eight years prior to the war, returns in lumber 
manufacture In the principal softwood regions, on the average, 
were yielding very low profits on the investments. While 
profits were greater during the war, the price of lumber during 
the war years did not Increase in proportion to prices of other 
commodities. As shown in figure 13, the average of com- 
modity prices rose in 1917 considerable in excess of the average 
of softwood lumber prices, which were partially restricted by 
Government price fixing. The war-time restrictions not only 
upon the price of lumber but upon its production and move- 
ment for the supply of the normal trade were unquestionably 
a large factor in the quick response of lumber prices to the 
abnormal trade conditions which followed the armistice. 
WHOLESALE COSTS AND PROFITS. 

Owing to the complexity of the trade, time was not available 
to determine average costs and profits representative of the 
various types of wholesale business conducted by individuals 
and organizations not attached to mill organization.s. The 
mill prices given are based on sales made by the larger mills 



TIMBER DEPLETION?, PRICES, EXPORTS, AND OWNERSHIP. 



53 



to retailers, wholesale dealers, and wholesale consumers. While 
a few of the larger mills do not sell to whole.sale dealers, the 
more general practice is to grant the whole.salers a discount on 
the prices made to retailers and wholesale consumers. Whole- 
salers, however, do a large business with small mills which 
are usually not in as close touch with market prices and from 
which they often obtain much lower prices than from the larger 
and stronger mills. They are thus enabled to increase very 
materially their portion of the niarfjin between mill price and 
the price paid by the consumer. 

TRANSPORTATION. 

The ext<'nt to which the growing distance between forests 
and markets lias steadily added to the cost of lunrber in east- 
ern markets and in the country retail trade of the Middle West 
has been indicated in figures 13 and 15, respectively. In the 
years before the more accessible forests were exhausted, trans- 
portation imposed a charge equivalent to from $1 to $3 per 
thousand feet. The cost to-day of importing lumber into New 
York from the South is approximately $9 per thousand and 
from the West Coast $20. An idea of the percentage of the pre- 
war and postwar retail price absorbed by transportation costs 
can be obtained from the following table. Freight charges are 
computed on the basis of 2,500 pounds per 1,000 feet : 

Table IS. 





Retail prices per 
thousand.^ 


Percentage of retail 
price absorbed by 
freight rates. 




1914 


1919 , 1920 


1914 


1919 


1920 


New York— Douglas fir flooring, 


$62 
32 


1 
S86 i J140 

36 SO 

-.3 112 

49 66 


31 

2S 

35 


25 
20 
16 


14 


Pittsburgh — Sout^ern pine 
boards, No. 2 com., 1x8 

Chicago— Douglas fir flnorin?. 
No. 2 cir ver. grain. 


11 
13 


Southern pine boards. No. 2 com.. 


22 









Although transportation costs have gradually increased, the 
table shows strikingly how present prices have outstripped 
freight increases made during and since the war, on specific 
grades and species. The table below serves to show the increas- 
ing transportation charges on lumber into Chicago, from the 
days when the forests were accessible to water transportation, 
as all rail shipments became necessary with the cutting out of 
the accessible forests. To-day the average freight charge on all 
lumber going Into Chicago is probably between $10 and $11 per 
1,000 feet, due to the increasing volume of western lumber which 
has entered the market during the past 12 or 18 months. On the 
basis of the present average retail price this would be equivalent 
to 12 to 13 per cent, as against about 20 per cent in 1912-1915. 



T.\BLE 19. — Transportation ' per M board feet 
Chicago. 



ihcr to 



By water trom- 


By rail from- 


Years. Al- 


Manis- 


Sasi- 

1 


Mem- 


Annis- 
ton, 
Ala. 


Bir- 

rnf: 

Ala. 


Merid- 
ian, 
Miss. 


Port- 
land, 
Greg. 


1877 tl.31 


$1.27 

1.46 
1 49 


























ia82;;;::;:::::". 1.92 












1885 1.64 












1888 1.90 






























i893.::::;::::::i 1:01 


1.46 
1.13 


$2.00 
2.50 


$4.50 
4.00 
4.00 
4.25 
4.25 


$5.75 
5.00 
5.25 








1897 1.18 






$12.50 


1900. . 


••$6:66- 

5.50 
5.63 
7 38 


1:M 




1905 
















1918-20... 








7 88 1 15 00 













In southern Minnesota it was possible to determine quite 
closely from the purchase records of a number of large line 
yard companies the average transportation cost carried by the 
lumber distributed through their retail yards. These steadily 
increasing costs, shown in the table below, are primarily due to 
the increasing volume of western lumber which these companies 
have had to import in order to supply the needs of their terri- 
tory, which only a few years ago was immediately contiguous 
to Ihe greatest lumber-producing region in the country. 

Table 20. 



Years. 


Average retail sell- 
ing price. 


Average transporta- 


Portion of average 
retail selling price 
absorbed by 
transportation. 




Per 
thousand. 


Per cent 
increa,se. 


Per 
thousand. 


Per cent 
increase. 


Per cent. 


Per cent 
increase. 


.„„, 


$26.03 
31.68 
34.64 

iJ:^ 

31.71 
31.17 
30.75 
32.28 
31.83 
30.44 
3L43 
38.58 
46.51 
54.42 


0.0 
2L6 

li 

21.8 
19.6 
18.1 
23.9 
22.2 
16.9 
20.7 
48.0 

l^^i 


$3.25 
4.25 
4.00 
4.00 
4 50 


0.0 
30.8 


12.5 
13.4 
11.5 
12.6 

14.7 
15.0 

11? 
20.9 
25.1 
27.9 

^^8 
23.1 
21.6 










8 


1908 


8 


1909 






4.75 1 46.0 
4.75 1 46.0 
5.75 1 77.0 
6.75 107.8 
8.00 1 146.0 
8.50 1 161.5 
7.50 1 130.5 
8.00 i 146.0 
10.75 1 231.0 








1912 


49 6 


1913 












1916 


91 2 


1917 





















It will be noted that the average selling price for 1919 shows 
an increase over 1905 of 109 per cent, while the increase In 
transpoitaition in relation to selling price was only 72.8 per 
cent. Although transportation's portion of the selling price 
has been steadily growing in dollars and cents, the price of 
lumber during the past three years has been increasing faster. 
The average selling price for March, 1920, was 230 per cent 
over the average price of 1905, but transportation absorbed only 
about 14 per cent, the smallest percentage since 1908. 

In 1905 northern pine, shipped on freight rates of from $2..50 
to $3 per 1,000 feet, formed 80 to 90 per cent of the retail stock 
of these companies, while western timber amounted to less 
than 20 per cent. In 1919 these percentages were almost re- 
versed, western timber forming practically 80 per cent of the 
stocks and northern pine less than 20 per cent. Owing to a 
larger proportion of western lumber In these stocks this year. 
It is estimated that the average freight cost represented by 
each thousand feet of lumber distributed will be between $12 
and $13, almost equivalent to the total average lumber price 
of $16 in that region 25 years ago. 

RETAIL PRICES AND COSTS. 

The vpaard movement of prices. — The movement of average 
retail prices in country districts in the Middle West from 
September, 1018, to March, 1920, is shown in figure 19. These 
values are based on line-yard distribution in Kansas, Okla- 
homa, Nebraska, and southern Minnesota, and represent aver- 
age selling prices for lumber only, arrived at by dividing the 
total sales in dollars by the total feetage of lumber sold. It 
will be noted that the average prices in the above regions coln- 
cid<' closely. From 1912 to 1915 the average retail price of 
lumber in these regions was around $30 to $32 per thousand. 
In September, 1918, average prices were between $40 and $50, 
and moved upward to about $85 In March, 1920. 

In the larger cities of the region, such as Chicago, Kansas 
City, and Minneaiiolis, there was a similar upward movement 
of retail prices. During the period 1912 to 1914 the average 
selling price of lumber In Chicago, Kansas City, and Minne- 
apolis was close to $26 per 1,000 feet. There was little varia- 
tion between the cities. The average gelling price in 1919 in 
Kansas City centered between $45 and $50 per thousand. 
.\verage prices of March, 1920, were variously estiiuated by 



54 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



retailers in Kansas City and Cliicago to be from $75 to $80 
per 1.000 feet, a few dollars less than the average shown for 
country trade. 

Prewar and postwar changes in wholesale and retail prices 
of specific softwood grades and species at various points 
througliout the country are indicated in Table 21. It should 
he explained that the margins shown between wholesale and 
retail values do not always accurately represent the actual 
margins, since the material sold in any given month may havo 




Mar 



^ept Nov. Uan. Man May. du/y Sept. Nov 
/S'S 'SI9 /i^-iu 

Fig. 19. — Comparison of trend of regional retail lumber values. (Baseil 
on averages of monthly sales.) 

been purchased months before. The margin varies with graded 
and species, retailers figuring a lower gross profit margin in the 
handling of common grades sold in large volume at a relatively 
riipid rate of turnover than for higher grades and special woods. 
The expense of handling hardwoods is, of course, much greater 
than for softwood lumber. For softwoods the margin on upper 
grades ranges from zero or a few dollars per thousand at or 
near mill points to $45 or .$50 in New York City, while for 
hardwoods, especially the upper grades, spreads as high as 
$80 are of record. 

Table 22 compares average selling prices of lumber distrib- 
uted through line yards in the Middle West, in March, 1920, 
with the selling prices in the period 1912 to 1915, and also 
with the selling prices in .\pril, r.il9, when prices began to 
ascend sharply. 



Tarle 



-Wholesale and retail prices of Douglas fir and 
miitlirrri yellow pine lumber at various points throtighout the 
United States. 





Wholesale prices (dollars 

per M leet). 


Retail prices (dollars 
per M teet). 


Pouglas fir. 


Septem- 
bcr, 
1918. 


Febru- 
ary, 
1919. 


Febru- 

S: 


Se^ptem- 
1918. 


Febru- 


Febru- 
ary, 
1920. 


No. 1 common, dimension 
2 bv 4 inches, 16 (ect, S. 


'9.50 
32.25 

32.00 

■0.50 
32.60 

" '28.56' 
38.00 

120.00 
51.00 


,.» 

30.50 
31.50 
30.00 
31.10 

18.50 
31.60 

'27.' 56' 
39.00 

43.00 
49.50 
55.00 
47.00 
47.13 
57.00 


40.00 
55.00 
50.35 
50.80 
52.80 

40.00 
55.30 
,55.00 
50.50 
55.00 

86.75 
103.60 
95.00 
98.00 
112. 15 
111.50 








':i^\ \::,-^-l^: 


43.33 

47.00 
41.. 50 
42.00 


47.66 
47.00 

40.00 
43.00 


62.50 
65.65 
63.00 
66.45 

40 00 


Kan,;.U-if . Mo'..'.'.'.'.'.'. 
Nn. 2 cloar vortical-crain 
floovins, 1 In- -1 incl.*.;: 


40.00 
48.00 


47.66 
49.00 
36.00 
49.00 


62.50 
65.00 
65.00 
66.65 




«8.33 
73.00 
56.00 
56.60 
62.50 


80.00 

58.50 
86.00 


112.50 






Minneapolis, Minn 

Kansas Citv, Mo , 

New York Cb- 


46. 00 
49.00 
150.00 


117.00 
128.35 
139.50 



Table 21.— 117io/r,s((/( 
southern iirlli, 





Wholesale prices (dollars 
per M feet). 


Retail prices (dollars 
per M feet). 


Southern yellow pine. 


Febru- 
f9T4. 


Febru- 


Febru- 
iS. 


Febru- 
ary, 
1914. 


Febru- 
f9Y9. 


Febru- 
ary, 
1920. 


No. 1 common, dimension 2 
by 4 inches, 16 feet, S. & 

'To\vns in southern yel- 






47.00 
63. .50 
64.75 

63.00 
65.75 
57.60 
59.00 
59.00 

105.00 
113.00 
108.35 
125.00 
110.00 
110.00 








KansasCitv, Mo 

Chicaso 111 


17.60 
17 60 


31.35 
« nn 


24.30 
23.55 


40.75 
47.00 


66.45 
65.15 

60.00 
66.80 


No. 2 common, boards, 1 by 
Sinches, ISfeet. S. 2S.: 
Towns In southern yel- 
low pine belt 




Kansas City, Mo 


16.60 33.65 


24.00 
22.70 

">'32.'66' 


43.00 






27.50 
97 f.n 




Pittsburgh Pa 


1 24 66 


36 50 1 SO 00 


B and better', flat-grain 
flooring, 1 by 4 inches: 
Towns in southern yel- 
low pine belt 






114.00 
133.55 


Kansas City, Mo 


23.50 i 42.35 

240.65 1 42.85 

23.75 ! 41.00 

I 43.25 


32. « 
2 61.66 
32.55 


52.00 


Chicago 111 


58.00 








'38.00 















' Febniary, 1913. 



:. — Comparison of average retail prices per 1,000 feet 
in various regions and times. 





\^lt 


March, 
1920. 


Per cent 
increase. 




$48.75 

49.20 

. 50.81 


$86.76 
85.86 
85.65 




Nebraska 


74.5 




68.5 








Period 
1912 to 
1915. 


March, 
1920. 


Percent 




S31.24 
31.29 


$86.76 
85.86 




Nehra-ika 


174.5 













Changing values in country retail distribution are further 
shown specifically in Tables 23 and 24, and graphically in 
figures 20 and 21. A comparison of essential cost factors in 
the average price of lumber in a large Middle Western city is 
indicated in figure 22. The average buying prices shown in 
Table 24 include freight. 



Tabi-i 



'O.sis and profits of retail lumber 
J!)12-1915 and 1919. 





Aver- 

semng 
price 

1.000 
leet. 


Gross profit. 


Operating cost. 


Net profit. 




Per 
thou- 
sand. 


Per 

cent 
ofsales. 


Per 


Per 
ofsales. 


Per 
thou- 
sand. 


Per 

ofsales. 


Missouri, Kansas, and 
Oklahoma: 
1912-1915 

1919 


$2(1.73 

$56.00 

SS.3 

$31.29 

$37.30 

83.2 

S31.24 

$54.41 
74.2 


$7.07 
$14. 86 
110.1 

$7.17 

$13.88 

93.5 

$7.25 


23.79 

22.91 
24.22 

26! 4 


$4.99 
$1.05 
81.3 

$4.33 
$7.33 
69.2 

^1 
68.6 


16.77 
16.16 

llfo 


$2. OS 
$5.81 
179.2 

$2.81 
$6. .55 
130.6 

$3.01 
S7.1S 
138.5 


7.02 
10.38 


Per cent increase 

Western Iowa and Ne- 
braska: 

1912-1915 


9.06 
11.43 


Per cent increase — 
Minnesota: 

1912-1915 

1919 


"It 


Per cent increase.... 





TIMBEK DEPLETION^ PRICES, EXPORTS, AND OWNERSHIP. 



55 



-Costs and profits of retail lumber distribution by 
tears lH0'i-l919. country trade, Minnesota. 





Averaee bujing 
price. 


Average selling 


Gross profit. • 


Yeirs. 


Per 1,000 
feet. 


Per cent 
increase.2 


Per 1.000 
feet. 


Percent 


Per 1,000 
feet. 


Per cent 

olsellinc 

pricp. ■ 


Per cent 
increase.' 




$•'0.37 
!3.53 
27.77 
25.90 
24.34 
25.22 
25.03 
24.38 
26.62 
25. 6S 
24.34 
25.63 
28.60 
36.63 
40.09 


0.0 
15.6 
36.4 
27.1 
19.5 
23.9 
23.0 

li 

40!5 
79.9 
96.8 


$26.03 
31.68 
34.64 
31.85 
30.43 
31.71 
31.17 

32^28 
31.83 
30.44 
31.43 
38.54 
46.51 
54.42 


0.0 
21.6 
33.0 

16:9 
21.8 
19.6 
18.1 

22:2 
16.9 
20.7 
48.0 

mo 


$5.78 
8.66 
7.60 
6.98 
6.49 
6.62 
6.29 
6.97 
6.36 
6.79 

1:S 
9.94 
9.88 

14.33 


22.1 
26.9 
21.7 
21.2 

foX 

20.1 
22.2 
19.2 
20.8 
21.7 
18.3 
25.5 
21.2 
26.4 




1906 


49.8 


19ns 


20.8 


1109 


12 3 








8:8 






1913 


10 


1914 


IT 5 


ms::::::::;::::; 












1918 


71 


1919 


148 






■ 


Operating cost. 


Net profit.' 


Yeirs. 


Per 1,000 


Per cent 

ofsellins 

price. 


Per cent 
Lncrease.3 


Per 1,000 


Per cent p , 

ofsellintTj^,^/.^™' 

price. I>°"<=''^'=- 


1905 


$3.08 
4.04 
4.08 
3.90 
4.12 
3.74 
3.94 
3.66 
3.82 
3.82 
3.65 
3.78 
5.07 
6.41 
7.15 


11.8 


n n 


3.51 
2.97 
2.36 
2.74 
2.22 
3.10 
2.34 

r^ 
2.01 

4.87 
3.47 
7.18 


10 3 0.0 


190G 


12 5 ! 31 n 


14 4 71 4 




11.6 
12.0 
13.3 
11.8 
12.6 
11.8 
11.8 
12.0 

}i:g 

13.1 
13.7 
13.1 


32.5 
26.5 
33.8 
21.4 
28.0 
18.8 
24.0 
24.0 
18.5 
22.7 
64.5 
108.0 
1.32.0 


10.0 1 30.0 








1910 


8 6 15 




7 1 17 8 






1913 

1914 

1915 


7.0 , -13.3 
8.4 1 1.5 
9 8 12 5 














1919 


13 3 166 n 









' The number of companies from whose records figures are talten 
varies somewhat, so that the gross profit shown in the table is not in 
all cases the exact difference between buying price and selling price, 
nor net profit the exact difiference between gross profits and operating 
costs. 

- Per cent increase figured on 1905 values as base. 

» Per 1,000-foot values. 

Distribution of price increase. — A.s has been pointed out, 
tlie average retail price of lumber in 1919 in tlie country trade 
of tlie Prairie States was about $25 higher than in the period 
1912-1915. For the yards covered in Minnesota tlie exact in- 
crea.se was .$23.17. Of this increase the manufacturer and 
wholesaler took $11.34, or approximately 50 per cent, the rail- 
roads $4.75, or 20 per cent, and the retailers $7.08, or approxi- 
mately 30 per cent. Of the retailers' portion, .$2.91, or 12 per 
cent of the total increase, was absorbed in increased cost of 
retail distribution. 

Retail profits.— From Table 23 it will be noted that retail 
operating expenses and net profits figured on percentage of 
business done had not changed greatly over those shown for 
the period 1912 to 1915. In that period the gross profit was 
close to 23 per cent in the region covered, while in 1919 the 
average gross profit centered around 25 per cent of sales. Com- 
puted on a thousand-foot basis, however, there has been a very 
decided change in margin of net profit and operating expenses. 
In 1912 to 1915, for example, the average net profit shown by 
country yards in Minnesota was $3.01 per i.OOO feet, and the 
total operating cost was $4.24 per 1,000 feet. In 1919 the aver- 
age net profit shown by over 100 yards in the same i-egion 
amounted to $7.18 and the operating costs to $7.15, or a margin 
of gross profit of $14.33. 

It should be borne in mind that the net profit shown includes 
a certain percentage of book profit, or gain on inventory, due 
to the rising prices during 1919. Actual cash profits are fur- 
ther reduced by the income taxes, which are not figured in as 
operating expenses. These taxes, of course, vary with the com- 



panies and profits shown. In the case of a representative com- 
pany which operates a line of some 40 or 50 yards the net 
profit, including gain on inventory after income taxes had been 
paid, was about $4.75 per 1,000 feet. A portion of the manu- 
facturers' increase was likewise absorbed by increased costs of 
production and operations. 

As previously shown, average retail selling prices for the 
Jliddle West, which were from $30 to $32 in 1912-1915, advanced 
to about $56 in 1919 and to about $86 in March, 1920. Buying 
prices averaged about $25 in 1912-1915, advanced to about $40 in 
1919, and in March, 1920, were still higher. Retail operating 
costs increa.sed from about $4.50 in 1912-1915 to about $7.85 in 
1919, and to about $8 in March, 1920. 



A study of prices and increased production and distribution 
costs during the prewar and postwar periods substantiates the 
statements made by many lumbermen that prices during the 
end of 1919 and the beginning of 1920 reached points unjus- 
tified by production and distributing costs. While present 
prices are sonrewhat below the March level they are still in 
excess of prices justified by increased production costs and fair 
profits. The following is believed to be a liberal approxima- 
tion of costs entering into the average retail price of lum'ber 
as determined for March, 1920, in the country trade in the 
Middle West. The lumbermen's figures on production costs, 
which may be considered outside costs, are accepted as a basis. 
The production cost is a weighted average computed from the 
relative per cents of various species in the retail stocks handled. 

Table 25. — Appro.rlmate production and distributing cost, 
March, 1920, per thousand feet of lumber. 

Lunil)er production (stumpage and selling costs In- 
cluded) $26.50 

Transportation (in-ill to retail yards) 12.00 

Retail distribution g. 00 

Total 46.50 

A\ wage retail selling price March, 1920 86. 00 

JIargin of profit (includes interest on investment) 39. 50 

The margin of profit indicated exceetls by $8 to $10 the total 
average retail selling price for the lumber sold in the same 
region during the 1912-1915 period, which included all costs 
and profits of manufacture and distribution. Irrespective of 
the distribution of this excessive profit, which, by and large, 
has unquestionably varied with relative advantages held and 
with relative abilities to dominate situations, lumber prices 
are excessive and yield profits bearing no rea.sonable relation 
to increased costs of lumber production and distribution. 

That prices went unreasonably and unfortunately high is 
readily admitted by many of the more responsible and far- 
seeing men In the trade, and is concretely evidenced by the 
efforts of numerous large companies to stabilize prices during 
December, 1919, and January and February of 1920, by action 
on the part of retail lumber dealers calling upon manufacturers 
to stabilize lumber prices, and by editorial comment in lumber 
journals. The following is an extract from a published letter, 
written by the secretary-manager of a large lumbermen's asso- 
ciation in response to a letter from the secretary of a retailers' 
association, suggesting that prices be stabilized until July 1 
at least: 

I am not violating any confidence when I say to you that the ."situa- 
tion has given the lumber manufacturers much concern, many having 
expressed themselves as deploring the fact that prices have been bid 
up to present figures by the buyers themselves. It is a little too much 
of a strain on human nature to expect that producers shall refuse 
to accept the highest prices offered for their goods. 



56 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



I 



Char}'- S/iowmgf P&rcen-/-c7^e /ncrea s es fn 
Transportaf/on C/7<:7rgres, Cost ofL u/?7 ber SfocAs to 
/x'efcri/erSj fPefai / Opern-/-//?^ Expenses, and A^era^e 
/?efcf// Lumber Prices. 

C^cfsec/ on oi^ercrg^e vc^/'ue-s per M l^e&f OQ shoivn 
by counfrc/ i/(:}rc/3 /n M/nnesol'a one:/ Da^ofa^.) 



A/o ie - Perce n fa^e /ncre<a s e 
figured on /906 vo/ue-s 
OS a bose. 




i 



Si'veiMl of the largest companies operating l)otli mills and 
rclail yards, for example, souglit to stabilize prices on their 
own responsiliility, and their efforts unquestionably had a I'ar- 
leaching elTect in breaking the rising jii'lces and bringing about 
a slight decline, ranging from $1 to $10 per thousiinrt, according 
lo grade. Many lumbermen admit that prices went so high that 
demand was automatically checked. There Is ample evidence 
throughout the Middle West that lumber prices reached a point 
which aroused public indignation In many communities, and 
that this feeling, combined with a widely advertised announce- 
ment of one of the largest pro<lucing and distributing com- 
panies that it proposed to stabilize prices on the basis of its 



.January list, resulted in a sharp falling off in buying. An 
extract from the jinnouncenient issued by this company late in 
February reads as follows: 

The interests comprising the group have come to recognize that iliis 
condition of the lumber market i.s injurious to the public anrl to the 
industry geiierall.v ;' that the uncertainty even more than the price level 
is demoralizing and results in enhanced cost of building and discour- 
ages construction, and that unless something is done to check the 
present tendency toward further and frequent and irregular advances 
which have no relation to costs of production the situation will become 
still more deplorable. 

The intent of the company to stabilize prices was construed 
by the public and the press as a cut In prices, and buyers quite 



TIMBER DEPLETION^ PRICES, EXPORTS, AND OWNERSHIP. 



Average Se/Z/ngPr/c e. 

Gross Prof/ /■ 

Opera tirtffE^tpense 

A/e/Prof/^ 

A verage Sef/ingPr) c& 

CroSsProfii- 

Opera finff Expense 

A/e/ Profd 



(Ba. 



' Sellm^Pr/ce 

GrossProf//- 

Op era ^/rigSxpef7Se 

A/e/- Praf) + 

A ver<3ffeSeJ//n^ Price 
Gross Prof/ / 

OperaH//g Expense 
NefPyof,-h 



Do//cfrs per M f&ef. 



Amount Percent 
perMft OfSa/es 



sMYc 



nTTTTH 

m 



S3 



ITTTTTI 
3 



80s 



5 /3 

s 



k^Ac/r^ 



Var-as) 



• i I .I 



.5 2d Yor, 



s 



/->r/c E -^ 



* E'^u/i/ti/enf- 



s 

■5 



*-£>( 



<j/7 rt'po/'i 



0% c '// re /oo 



■S'/a i'>r> r< 'por. '-ec/ 



J 9 7/ 
/0.7/ 
90* 



/ SJO 

* 2.60 

ed }fii/-e^fr>7en-f: 

/ 6.77 /7. 'f'S 

-3.72 //.2S 

/ 20^ 6 /<9* 

ves^mert / 



950.-20 

S 6/2 

/ 3 7d 

# 2.3/5 
>iyesfrn<snt 

S^730 

§l2.s57 

m 7.76 



20. 26 
/2.46 
7. 80* 



21 9^ 
/3 3< 



8/ 3<o* 

nvesfm erif. 



Oo//ars 
Fig. 21. — Comparative av( 



/O 



/v5 20 2S 30 3S 'PO ■fS v50 SS 60 

isses ot lumber sold, gross profits, total operating expenses, and 
■ds in Nebraska, £or years 1905. 1910, 1915, and 1920. 



u'enerall.v tlirougliout the northern portion of the Middle West, 
in which the company operates retail yards, deferred purchases 
in order to buy on the company's list or to await similar reduc- 
tions throughout the trade. 

A statement issued about the same time by the president of 
anotlier group of companies contained the following : 

We regard tbe present prices of lath as detrimental to the best inter- 
ests of all branches of the trade and not defensible either on the basis 
of production and distribution cost or on the basis of a fair market 
value. 

PRICE CONTROL. 

Neither time nor facilities were available to investigate the 
extent, if any, to which prices since tlie armistice have been 
.subject to artificial control. It is believed, however, that the 
data presented are fairly conclusive in indicating that during 
tlie last half of 1919 and the flr.st montlis of 1920 no control of 
prices was necessary to lift prices. 

SOME SPECIFIC EFFECTS OF REGIONAL DEPLETION 
ON PRICES. 

Regional forest exhaustion, with constantly increasing dis- 
tance between forest and marlset, gives rise to many accessory 
conditions vitally affecting the price of lumber to the con- 
sumer. Among the more important are': 

Opportunities for speculation In lumber prices by botli 
producers and distributors tend to Increase as the distance be- 
tween forest and market becomes greater and as a species of 
lumber becomes scarcer. During the S or 10 months preceding 
March, 1920, much speculation entered the trade in markets far 
removed from the producing regions. Tlie common use of the 
roconsignment privilege, for example, by which curs of lumber 
are shipped prior to sale, the shipper or wholesaler, as the case 



may be, relying upon favorable sale while the lumber is in 
transit or when it reaches a consignment point, was a fruitful 
source of speculation. These cars were often held for bid prices 
and served to intensify the auction market and to lift prices. 

During the past year demurrage charges on transit cars 

amounting to $100 and $200 per car were not uncommon. The 

records of transit cars at the Minnesota transfer alone show 

that during the period October, 1919, to March, 1920, 3,000 cars 

CITY TRADE 



1 verage of 3 Cornpanies 



-ating £jtpe 
Profit 











umpni 




1 


■ 


1 


1912 To I9i^ 

Inclusive 




^ 




















ji 




i 


0— 3 


* 


s 



Transportation 
Operating Expense 



Dollars Per M FT. 



A Represe 


nfative Firm 


^^^^g^m 


1 1 \ 


\ 


^^^H .1 


' ^^^^ 




1 ^m 


i \ \ '\-^ 


W 20 


30 ^- J 



Dollars Per M ■ 



-Comparison of the essential cost factu 
price of lumber, Kansas City. 



58 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



\voi\' lield without disposition for an aggregate period of 17,453 
days — an average of 5.8 days per car — and incurred accrued 
demurrage and penalty cliarges amounting to a total of $76,529. 

As growing distances between forests and marliet increase 
opportunities for price speculation, more and more middlemen 
are drawn into tlie trade. While the responsible wholesaler 
is an essential factor of the trade, a surplus of middlemen is 
an added burden of cost upon lumber distribution. It has been 
estimated tliat lumber brokerage and wholesalers' offices on 
the Pacific coast increased 50 per cent during 1919 and 1920. 
It is often the case that men drawn to the trade by its specu- 
lative possibilities are of the less responsible type, whose 
methods are not to the best interests of the trade and the public. 

Speculation, with its accompanying sharp increases of lumber 
prices, tends to bring upon the market lumber in inferior con- 
dition. During the months following June, 1919, for example, 
a general complaint throughout the Middle West was that 
lumber was inadequately or improperly dried, due mainly to 
the fact either that it was shipped before being properly 
dried or that it was too rapidly seasonetl in kilns. This, of 
course, may be attributed to the desire of the manufacturer 
to ship the lumber before high prices receded or at bid prices 
offered by jobbers. 

The load imposed upon the railroads in transporting lumber 
to meet the country's needs increases directly with the increa.se 
in distance between forest and market. More cars and more 
labor are required, and the chances of breakdown, delays, and 
tratHe tie-ups, which create lumber shortages and high prices 
in markets affected, are multiplied. Markets farthest removed 
are subjected to increasing hazards In obtaining a continuous 
supply of lumber at stable prices. 

Concentration of lumber production in one or two principal 
regions accentuates the seriousness of reduced production aris- 
ing from local labor troubles in woods or mills or from un- 
favorable weather conditions. 

The cutting out of timber in different regions carries with 
it a change in the character of lumber stocks in dependent 
regions both as to species and grades. This tends to confuse 
the trade and upset industries dependent upon certain grades 
and species of lumber as a raw product. At the present time 
many large wood-using concerns which have developed their 
factories and their products on the basis of special ^^■oods are 
facing with great concern shortages in the market supply of 
these vioods, and in many instances have had to turn to other 
species involving new problems of manufacture. 

SUMMARY OF PRINCIPAL PRICE CONCLUSIONS. 

During the latter half of 1919 and the early months of 1920, 
lumber prices in the United States increased more sharply and 
to far higher points than were ever known before. In March, 



1920, average mill prices had Increased 300 per cent and more 
over 1914, and the average retail prices showed increases rang- 
ing from 150 to 200 per cent. 

While the costs of lumber manufacture and distribution like- 
wise increased, the rise in lu'mber prices was wholly dispropor- 
tionate to these increases. Present prices, although somewhat 
lower than those reached in March, 1920, are still excessive and 
yield profits unjustified by costs. 

The " auction " market which characterized the trade was 
precipitated by a sudden urgent demand for lumber, which de- 
veloped in the spring of 1919, in the face of inadequate stocks of 
lumber due to subnormal production. The situation was further 
aggravated by a restricted movement of lumber caused by car 
shortage. The resTilt was a lessening of competition, which en- 
abled the seller with stocks available to auction his lumber to 
buyers who were in urgent' need of material or who were 
frightened by reports that lurttber prices would go higher. In 
.January and February, 1920, prices became so excessive that 
buying was automatically checked. 

The history of lumber prices is that as forest regions acces- 
sible to the larger consuming markets are cut out lumber 
prices are pushed upward by increased costs of production 
and distribution incident to the exploitation of less accessible 
or more distant forests and by altered competitive conditions 
in the markets occasioned by changes in species and in main 
sources of supply. In any given market prices are predomi- 
nantly influenced by the species of greatest supply and general 
utility. As that species becomes depleted and scarce it in- 
creases in price and tends to draw the level of competing prices 
with it. Regional forest depletion therefore results in weak- 
ened interregional competition, which in the past has been 
one of the most effective influences in restraint of lumber price 
advances. 

Timber depletion is therefore an important contributing fac- 
tor in present high lumber prices but is not the only cause. Lum- 
ber i)roduction has fallen off to a marked degree in many regions 
as a result of the cutting out of the forest. Freight congestion, 
climatic conditions, labor troubles, and other factors which have 
reduced output: in the regions still maintaining large industries 
have, as a result, been greatly emphasized and have been di- 
rectly related to depletion in their effect on prices. Transporta- 
tion charges have been increased to most of our largest consum- 
ing centers. Competition among manufacturers has been re- 
duced and a greater opportunity created for manufacturers and 
dealers to auction their product at higher prices. All of these 
factors have tended to increase lumber prices and have accentu- 
ated depletion. If large-scale production had still been possible 
in New England, New York, Pennsylvania, and the Lake States, 
there can be little doubt concerning the beneficial effect upon 
ma'-ket stability and lumber prices. 



LUMBER EXPORTS AND TIMBER DEPLETION. 



LUMBEK EXPORTS BEFORE AND DURING THE WAR. 

Pi-ior to the war, tlie United States exported annuaUy about 
3 billion board feet of lumber and saw logs, aside from con- 
siderable quantities of railroad ties, staves, and other wood 
products. The export trade absorbed about 8i per cent of the 
lumber cut. Nearly half of the lumber shipped abroad was 
southern yellow pine, aud softwoods all told constituted about 
79 per cent of the export trade. An important factor in the 
foreign trade is the export of high-grade hardwoods. More than 
10 per cent of the yearly cut of oak, or about 300 million board 
feet (mostly white cak), was exported. In addition to 41 million 
feet in the form of staves. Seven per cent of the annual cut of 
yellow poplar, or 35 million feet, w-as exported, and nearly 50 
per cent of the yearly cut of black walnut, or about 25 million 
board feet. Considerable quantities of hickory, ash, and other 
i.igh-grade woods for vehicle parts, agricultural implements, 
etc., were also exported. 

In 1913, 37 per cent of the lumber exports were shipped to 
Europe, 30 per cent to North America (chiefly Canada and 
Mexico), and 16 per cent to South America. 

The foreign lumber trade fell off to a marked degree during 
the war, particularly lumber exports to Europe. The total 
exports in 1918 and 1919 were but one-third of the quantities of 
lumber and logs exported in 1913. The foreign trade in hard- 
woods has showu the least decline, the volume exported in 
1918 being 88 per cent of that In 1913. 

1 
PROBABLE DEVELOPMENTS IN LUMBER EXPORTS. 

Following the .suspension of hostilities, lumber exports huve 
been very slow In returning to their prewar volume, mainly 
on account of exchange rates running against European 
countries, high cha rter rates on shipping, and the unprecedented 
demand and high prices for lumber in our domestic markets. 
As more normal trade conditions with Europe are reestablished 
there will undoubtedly be a marked increase in lumber exports. 
The emergency needs of Europe for reconstruction and long- 
delayed expansion in housing facilities, railroads, etc., have been 
estimated at 7 billion feet of lumber annually for some time to 
come over and above the consumption of normal times. Great 
Britain, France, Italy, Germany, Belgium, and Holland are 
lumber-importing nations now experiencing exceptional and 
often acute shortages of wood as an aftermath of the war. For 
the most urgent reconstruction and expansion, particularly of 
railroads, these countries will presumably seek to obtain lum- 
ber in large quantities from the United States as soon as ex- 
change rates reach a stable and more satisfactory basis. In- 
quiries for several million railroad ties from Great Britain and 
France have, for example, been made of American manufac- 
turers, and indications point tj a relatively steady demand fnini 
Europe for this product. 

It is, nevertheless, imi robable that the United States will be 
called upon for any considerable part of the ordinary grades of 
building lumber required in the reconstruction of western 
Europe. Europe itself contains large quantities of timber suit- 
able for such purposes, particularly in Russia, Finland, Sweden, 
Norway, aud the new countries carved out of the Austro- 
Hungarlan Empire. Large lumber stocks ac<Mnmilate<l in llic 
countries of the Baltic Sea during the wai- awail marki^liui;. 



The pressure upon all Eur<ipe;in countries having extensive for- 
est resources to exploit them and develop trade relations for 
marketing their products as a means of industrial rehabilita- 
tion will be very great. These countries, with their advantage 
of proximity, better knowledge of trade customs and require- 
ments, and the cheapness of their products, bid fair to supply 
the bulk of the demands for lumber of general utility arising 
from the war. 

On the other hand, European demands for high-grade timber 
products from the United States, such as large structural and 
ship timbers, flooring, hardwood staves, and furniture, vehicle, 
or implement stock will Increase. High-grade woods suitable 
for many of these purposes can not be had in large quantities 
from any European sources now available for exploitation. 
The recent improvement in the exchange rate with Great 
Britain apparently has already brought a marked increase In 
the British demand for hardwoods, which is a factor in fur- 
ther reducing stocks and maintaining high prices on hardwood 
lumber required by American furniture makers and other 
manufacturers. Hickory and ash handles are now going to 
Europe in considerable quantities, the foreign demand for 
these products again being a factor which affects stocks and 
prices lu the domestic markets. 

As previously iiidicated, the European trade forms less than 
40 per cent of our lumber exports. The development of Cen- 
tral and South America, parts of Africa, China, Australia, aud 
New Zealand will naturally result in a gradual Increase in 
lumber ext)orts to those countries. Central and South America, 
while containing large hardwood forests, are now dependent 
upon imports from the United States, Canada, and Sweden for 
the bulk of their softwoods, the chief staple in international 
timber trade. Several of these regions may in time develop 
forest industries suflielent to supply their own needs, and new- 
sources of International lumber supply may be developed in 
regions like Siberia. Nevertheless, the United States must 
anticipate a gradual but material increase in the demand for 
Its lumber ))roducts from these parts of the world for some 
time to come. This demand will comprise mainly lumber of 
relatively high grade. It vill, however, probably run to less 
specialized and high qualit* products than the European trade 
and will consist chiefly of llie better grades of softwood build- 
ing and construction lumbei-, with considerable quantities of 
railroad ties. 

The exports to Canada and aiexico, on relatively short-rail 
and coastwise shipments,' will comprise an average run of 
sawmill products corresjionding to that taken by the domestic 
trade. 

EFFECTS OF EXPORTS UPON DOMESTIC TIMBER 
SUPPLIES. 

The di'plction of the virgin forests of the United States is 
making itself felt lirst through the growing scarcity of timber 
of liigh (luality — the products cut from large, clear logs repre- 
.sentiug the cream of our virgin forests. During the past 25 
years such products have risen in price more rapidly than the 
conunon grades of lumber. The most serious effect of the for- 
eign li-ade will be to increase the shortage of high quality prod- 
ucts, because it is exactly such products which are .short the 
world ovi'r and which luniber-iuipurling nations will in tli long 
run most desire lo obtain from the United States. 

59 



60 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



This effect will be most pronounced in the case of American 
lianlwoods. Tlie foreign demand for such species not only 
includes cabinet, furniture mailing, and finishing woods of 
special beauty, like walnut or quartered oak, but also many 
woods used In manufacturing essentials of commerce and in- 
dustry, like oak and hickory wagon stock, hickory spokes, high- 
^rade car stock, ash and hickory handles, woods used in agricul- 
tural implements, and the like. The supply of old-growth 
hardwoods from which most of these products are obtained is 
Hearing its end. Our domestic industries are securing such 
materials with increasing difficulty and cost. Except as substi- 
tute woods or other materials may be found, the growing short- 
age of these products must in any event seriously handicap 
.Vmerican industry and commerce. 

The second important bearing of foreign shipments is upon 
the remaining supply of high-grade southern yellow pine which, 
up to the present time, has furnished about half of the total 
lumber exports. The materials which the foreign consumer de- 
mands include a large proportion of high-grade flooring and 
other forms of finish and large timbers for shipbuilding and 
other structural purposes. The situation as to the supply of 
these products is less serious, and quite unlike that which holds 
true of the hardwoods. The total production of yellow-pine 
lumber will probably decline steadily during the next 10 or 15 
years; and the production of high-quality products from old 
growth will drop off still more rapidly. Such high-grade prod- 
ucts will, however, continue to be cut from particular localities 
or holdings, though in diminished amounts, for 30 to 40 years, 
and the substitution of western softwoods for both export and 
domestic products now made of southern pine is entirely prac- 
ticable. 

In the third place, export demands will strike the large sup- 
plies of higli quality softwood timber in the Western States. 
The Pacific coast carries- on a gradually increasing trade with 
the Orient, with Au.stralia, with South America, and with' 
Europe. It will logically replace the exports of southern pine 
as that timber is further depleted. Here, again, the foreign de- 
mand will take mainly high-grade products, particularly large 
structural timbers, shipbuilding materials, and the better grades 
of clear flooring and other forms of finish. With this demand 
for high-grade materials will probably be supplied varying 
quantities of railroad ties and general utility lumber. 

The large virgin forests of the West will sustain the maxi- 
mum demand made upon them by the export trade for many 
years without serious effect upon domestic markets. The do- 
mestic demand for high-quality timber products from the West 
will, it is true, increase with rapidity as their production in 
the South falls off. And in the West, as in the South, the first 
evidence of depletion will be a scarcity of products of high qual- 
ity. There is this marked difference, however, in the West, 
that the existence of large National Forests where timber is 
cut under careful restrictions affords a means for reserving rea- 
sonable quantities of high-quality timber and for producing 
stumpage of this grade. 

It must therefore be recognized that a material increase in 
the export lumber trade would accentuate the shortage of high- 
quality products available to American consumers. The prob- 
lem presented by lumber exports is not serious from the stand- 
point of quantity. It may prove iserious from the standpoint of 
quality. Scarcity of high-quality products essential to our ship 
and car building and many other industries is the first and one 
of the most serious effects of timber depletion. 

The eventual solution of the problem presented by an active 
foreign trade is therefore identical with the remedy for deple- 
tion through domestic consumption, namely, not to restrict the 
use, but to increase the production of timber by getting all 
forest-growing land at work.. It must be recognized, however, 
that this remedy in itself will not entirely meet the need for 
timber of high quality. With some exceptions, such material 



can not be grown in less than 150 years ; and even if every acre 
of denuded land in the United States were planted to-morrow, 
a long time would elapse before the depleti(m of high-quality 
stumpage which has been cut so freely from our virgin forests 
could be made good. Furthermore, the private landowner can 
seldom afford to carry timber crops during the long periods 
necessary to produce, material of high quality. The most ef- 
fective means of overcoming the shortage of high-grade timber 
is the creation of public forests which can be utilized to the 
extent necessary for the production of large timber or, special 
products. 

The bulk of the high-quality timber produced in France and 
other countries of Continental Europe is grown in public forests, 
it being a recognized function of the Government to produce 
on its forest lands the classes of material which will not be 
grown in sufficient quantity on private lands because of the 
time and cost involved. This policy has already been applied 
to the hardwood forests acquired by the United States In the 
southern Appalachians pursuant to the Weeks Act. As far as 
practicable, these forests will be handled so as to produce high- 
quality hardwoods rather than railroad ties and common lum- 
ber, so that they may be at least a factor in meeting the short- 
age of such products. But no adequate provision for the grow- 
ing of high-grade eastern woods has yet been made. It can be 
nmde only by largely extending the public forests in the 
Eastern States. 

IMPORTS OF FOREST PRODUCTS. 
Dnrini,' the lour years preceding tlie war the imports of 
linnlier and logs ranged from 1.100,000,000 to 1,300.000,000 board 
feet, or about one-third the volume of exports during the same 
period. Beginning with 1917, there was a marked increase in 
wood imports. In 1918 imports exceeded exports by 100,000,000 
board feet, and in 1919 the excess of imports was probably much 
greater. Aside from the importation of 1,370,000 cords of pulp 
wood from Canada in 1918, the United Sttites imported 596,000 
tons of wood pulp and 516,000 tons of paper, chiefly from the 
same source. 

Imports of timber and timber products fall into three classes : 

(1) Cabinet woods, like mahogany and cigar-box cedar, and 
other valuable woods, like South American greenheart. which 
can not be obtained in the United States. The imports of cedar 
amount to nearly 20.000,000 board feet annually, and the im- 
ports of mahogany to 50,000,000 board feet. 

(2) Saw logs and manufactured lumber from Canada, shipped 
into the United States by the natural routes of commerce on 
the Atlantic and Pacific coasts and by favorable railroad chan- 
nels. Such imports aggregate about 1,000,000,000 feet per year, 
aside from which Canada also ships close to a billion shingles 
into the United States annually. These imports compete di- 
rectly with similar products manufactured in the United States. 
There is, indeed, approximately the same flow of lumber across 
the Canadian boundary in each direction, determined by the 
favorable location of consuming regions in one country with 
respect to lumber-producing centers in the other. 

(3) Paper and materials for making paper. The imports 
of pulp wood, pulp, and manufactured paper in 1918, prac- 
tically all of which came from Canada, were approximately 
2,071,000 tons. Imports of corresponding products were still 
greater in 1919. They furnish about two-thirds of the news- 
print paper consumed in the United States, a proportion which 
will grow steadily unless the foreign trade policy adopted by 
Canada prevents. 

Other imports of forest products are at the present time of 
negligible importance. Prior to the war the United States im- 
ported considerable quantities of chemical pulp and high-grade 
papers from Scandinavia, a trade whose partial resumption Is 
to be expected. A small quantity of lumber is shipped to our 
west coast from Japan and Korea. The enormous timber re- 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



61 



sources in Siberia liave not yet been developed sufficiently to 
support a foreign lumber trade. " 

The two important classes of products for which the United 
States now depends upon foreign countries are cabinet and 
other extremely valuable woods from tropical countries and 
Iiaper or its raw materials. Our dependence upon Canada for 
paper is an extremely important factor which must be reck- 
oned with for many years to come. This results in part from 
the depletion of pulp-making woods in the eastern United 
States and in part from transport and manufacturing condi- 
tions which liave prevented the paper-making industry from 
utilizing pulp timbers available in the Western States and 
Alaska. Adequate development of our western pulp-wood re- 
sources could make the United States independent of foreign 
supplies of paper. 

EXPORT TRADE POLICY. 

It must be recognized that, unlike most articles of commerce, 
the replacement of a considerable part of the raw material con- 



sumed in lumber exports will, under the best conditions, be a 
slow and difficult process. Foreign trade in softwoods has 
less serious effects than the export of hardwood products; a 
foreign trade in such articles as softwood railroad ties and 
common lumber is the least serious of all since such com- 
modities can be produced with comparative rapidity in large 
quantities once growth replaces devastation of our forest lands. 
On the other hand, foreign demands for high-grade hardwoods 
endanger certain of our " key " industries such as the manu- 
facture of agricultural implements, vehicles, and handles. 
Without any exports we face a serious shortage in tlieir raw 
materials. These facts should be considered in determining the 
foreign-trade policy of the country and in weighing the ad- 
vantages of reciprocity. Our fundamental national policy, 
however, should be for timber growth rather than the regula- 
tion of timber use. If the export trade in lumber is to be 
regulated, such regulation should be discriminating and should 
apply to the grades and products in which a shortage is most 
imminent and most menacing to domestic industries. 



CONCENTRATION IN TIMBER OWNERSHIP, MANUFACTURE, AND MARKETING. 



CONCENTRATION OF TIMBER OWNERSHIP IN 1910. 

A tliorough investigation of timber ownersliip in the I.alie 
States, the southern pine region, and the Pacific Northwest was 
made by the Bureau of Corporations in 1910. .\t that time 
tliese tliree great forest regions contained about 80 per cent of 
all the standing timber in the United States. The two most 
striking facts reported I)y the Bureau of Corporations, follow- 
ing its investigation, were the concentration of control of stand- 
ing timber in comparatively few large holdings and the vast 
scale upon which the speculative purchase and holding of tim- 
ber in advance of its use had been conducted. Both of these 
conditions were attributed directly to tlie public-land policy of 
the United States. The Bureau of Corporations found that 48 
per cent of the standing timber privately owned in the.se three 
regions, or 839.7 billion feet, was held or controlled by 195 
owners. Three large corporations held between them 2.38 bil- 
lion feet, or 11 per cent of all the privately owned timber in the 
United States. The concentration of standing tim))er in large 
Iioldings was nio.st fully developed in the Lake States and the 
Pacific Northwest. 

The degree of concentration of standing timber in 1!)10 in the 
States covered by the investigation of the Bureau of Corpora- 
tions, and subsequent changes or tendencies in so far as it has 
been possible to determine them, are sununarized in the follow- 
ing brief account of timber ownership in a nunilier of the more 
important foiest regions : 

TIMBER OWNERSHIP IN THE NORTHEAST. 

The 1910 investigation did not cover this region. The only 
timber holdings of large size in New England are located in its 
northern softwood forests and have been consolidated primarily 
to secure large supplies of pulp wood. Fifteen owners have 
acquired something over 5* million acres in Maine, New Hamp- 
shire, and Vermont, or nearly one-fourth of the forest area of 
these three States. These 1.5 owners undoubtedly control at 
least half of the supply of pulp wood in New England. The 
process of timberland concentration is still going on to a con- 
siderable degree, especially in Maine, where the large properties 
of one of the paper companies were acquired and assembled dur- 
ing the past three years. In New Hampshire the United States 
it.self has acquired a comparatively large timber holding through 
the purchase of over 400,000 acres in the White Mountains under 
tlie Weeks law. 

The pulp-wood forests of New England are very largely held 
on an operating rather than a speculative ba.sis. The non- 
operating owners in practically all cases are selling timber 
to operating companies for current logging requirements, re- 
taining the land. 

In New York 17 pulp and paper companies have aggregate 
holdings of nearly 800,000 acres. The largest of these owner- 
ships exceeds 200,000 acres, and the .second in size exceeds 
150,000 acres. Practically all of the softwood stumpage in New 
York is very strongly held, and there is little tendency toward 
further concentration at the present time. 

A significant fact in New York is that the State itself is the 
largest owner of merchantable timber, having acquired 1,886,000 
acres of forest land in the Adirondack and Catskill Preserves, 
which contain 60 per cent of the pulp timber in the State. The 
cutting of these lands is prohibited by the State constitution. 
The situation in New York is thus in striking contrast to that 



in Maine, where almost the entire supply of pulp timber is in 
private ownership. 

OWNERSHIP OF SOFTWOOD TIMBER IN THE SOUTH- 
ERN STATES. 

The Bureau of Corporations reported in 1910 that 14 holders 
controlled three-fifths of the cypress in Louisiana, and that 11 
owners controlled one-half of the cypress in Florida. Each of 
these 25 owners had acquired more than 250 million feet of 
cypress stumpage. There has been comparatively little change 
in the ownership of cypress land since 1910. The limited supply 
and high value of this timber and the large investments re- 
quired for operating plants tend to keep the stumpage in the 
hands of relatively few owners. The enlargement of the ex- 
isting cypress holdings is becoming more and more difficult, 
and the total quantities of timber held by the groups of large 
owners are diminishing as cutting progresses. 

The Bureau of Corporations reported that 29 holders in 1910 
owned 22 per cent of the yellow-pine timber in the Southern 
States, each of these owners having acquired over 2 billion 
board feet. Sixty-seven owners held 31 per cent of the south- 
ern pine, but the ownership of 50 per cent was distributed 
among 307 holdings. 

The concentration of southern pine in large holdings appears 
to have practically stopped about 1909. The number of hold- 
ing companies vi^hich are not operating is very limited, sales of 
timber are very few, and practically all of the remaining stump- 
nge is definitely related to manufacturing plants. 

The siiuthern pine belt well illustrates the increasing degree 
(if ccincentratinn (,f timber of high quality as the depletion of 
forest resources continues. The Soutli contains to-day approxi- 
mately 139 billion feet of virgin pine, controlled by 5,401 saw- 
mill.s. It is estimated that in 10 years the remaining stand of 
old-growth pine will be in the hands of 147 mills, and that in 
20 years the 30-odd billion feet of virgin pine timber left will 
be held by 45 mills. The number of mills alone does not indi- 
cate the degree of concentration, since a number of corporations 
control and operate several mills. 

The southern pine region also illustrates the replacement of 
lai-ge sawmills by small operations, as the greater part of the 
virgin stumpage is cut out and the industry passes over to the 
cleaning up of odds and ends and the manufacture of second 
growth. The number of small sawmills in the South is in- 
crea.sing more rapidly than the number of large plants, which 
are closing down. During 1919 from 800 to 1,000 small mills 
were established in this region, a movement, of course, greatly 
stimulated by the high lumber prices. 

OWNERSHIP OF HARDWOOD TIMBER. 

In ]!)10 the Bureau of Corporations found that timber owner- 
sliiii was less concentrated In the hardwood forests of the 
South than in any other region investigated. The same is true 
to-day. Hardwood forests lend themselves fo concentration 
much less readily than coniferous timber. The number of 
.species in the usual stand is great. Manufacture and market- 
ing must be highly specialized, with diversified products de- 
manded by a wide range of manufacturing industries and 
other users. Co.sts of production run higher than in the case 
of softwood forests. Hence the individual hardwood hold- 
ings have averaged much smaller and the average hardwood 
mill cuts much less timber than in the case of softwoods. 



TIMBEE DEPLETIOX, PRICES, EXPORTS, AND OWNERSHIP. 



63 



Tlic unmial cut of 11 of the largest hardwood operators in 
Ihe southern Aiipiihu-liians is about 400 million feet. This 
represents 12* per cent of the cut of the region. The remain- 
ing 87* per cent of the output is manufactured by companies 
wliit'li produce less than 10 million board feet yearly in every 
case. In the Mississippi or " Delta " region less than 30 com- 
panies reporte<l a lumber cut of more than 10 million board 
feet annually. In the whole hardwood region there are no 
luildings comparable to the large operating groups in the sf>ft- 
wood forests of the West and South. 

At least 10 million acres of hardwood forest in the Ap- 
palachian Mountains are owned by coal, oil, gas, and otlier 
mining corporations. One and one-half million acres have been 
acquired liy the I^'ederal Government as National Forests under 
the act of March 1, 1911. The remaining hardwood areas in 
this region, and the same appears to be true of the " Delta " 
hardwood belt, are widely disti-ibuted and largely in the liands 
of operating companies. 

TIMBER OWNERSHIP IN THE LAKE STATES. 

The Bureau of Corporations reported in 1910 a marked degree 
of timber concentration in tlie Lake States, particularly in the 
most valuable species. Six owners thus held 54 per cent of the 
white and Norway pine in Minnesota, but only 2 per cent of 
the hardwoods, then rated as of inferior value. Thirty-two 
holdings in Minnesota, each exceeding 60 million board feet, 
aggregatetl 77 per cent of the valuable pines and but 11 per 
cent of the hardwoods. Ten holders had acquired 24 per cent 
of all the timber in Wisconsin and 12 holders had acquired 
2S per cent of the timber of Michigan. 

Since 1910 a good many owrters have disappeared from the 
rolls in the Lake States through the exhaustion of their hold- 
ings. The few nonoperating holders appear to be disposing of 
ilieir lands, and a very large proportion of the timber in the 
i-egion is now attached to going operators. 

TIMBER OWNERSHIP IN IDAHO. 

In 1910, 6-1 per cent of the privately owned timber in Idaho, 
or 32.3 billion board feet, was held by 10 owners. Each of 
these lioldlngs comprised over half a billion feet. The three 
largest owners jointly controlled 46.2 per cent of the private 
timber in tlie State. 

The concentration of timber ownership in Idaho appears to 
have practically stopped about 1907. Since that time the 
larger holdings have remained practically at a standstill, ex- 
cept for depletion from cutting and exchanges between com- 
panies to secure a better blocking of stumpage for operating 
purposes. The stoppage of further timber purchases about 
1907 appears to have -Ijeen due to a full realization of the 
cost of carrying stumpage for long periods in advance of oppor- 
tunity for its manufacture and to the general period of lean 
years which the lumber industry experienced, particularly 
from 1913 to 1915. For the same reason a number of non- 
oiierating companies have constructed sawmills and become 
manufacturers. 

Timber concentration had, however, gone very far in Idaho, 
particularly in the case of western white pine, the most valu- 
iible timber tree of the Northwest. Of the 20 billion feet of 
whire pine in this region, 5 billion feet is owned by the Federal 
Covcrnmont, chiefly in National Forests, the State of Idaho owns 
3 billion feet, and 12 billion feet are privately owned. A single 
group of affiliated companies controls one-half of the privately 
owned white pine, or 6 billion feet. With the exception of the 
Northern Pacific Railroad, one of the largest timber holding 
companies in tins territory, there is no tendency to break up 
or decrease the size of the larger properties. The Northern 
Pacific is disposing of its timber as opportunity affords. The 
State of Idaho has announced a policy of disposing of its timber 



lands. There is a marked tendency in Idaho, however, to put 
timber holdings upon an operating basis and to construct ad- 
ditional sawmills in sufficient number to liquidate most of these 
great properties within 25 or 30 years. 

TIMBER OWNERSHIP IN WASHINGTON AND OREGON. 

In those States, the Bureau of Corporations found in 1910 
the most striking examples of timber concentration. Three 
owners controlled 191.3 billion board feet of timber. There were 
83 owners who had acquired over a billion board feet. Their 
aggregate holdings were 411.7 billion feet, or 59.4 per cent 
of the privately held stumpage in the two States. 

Since 1910 the three largest holdings in this region have been 
decreased. By decision of the Federal courts the land grant of 
2,425,000 acres to the Southern Pacific Railroad Co. in Oregon 
has reverted to the Government. The Weyerhaeuser Timber Co. 
has sold approximately 250,000 acres, chiefly to operating com- 
panies, and has itself become a large timber manufacturer. 
The Northern Pacific Railroad Co. has sold 522,000 acres of 
tiuiberland in Washington, a considerable part of which has 
gone to operating companies. 

In the State of Washington individual holdings in exce.ss of 
25,000 acres, or approximately 1 billion feet of timber, had as 
a group acquired 155.100 acres of additional timberland be- 
tween 1910 and 1919 through the consolidation of small hold- 
ings. On the other hand, this same group had during the same 
period decreased its holdings by 970,630 acres through logging, 
timber sales, failures, etc. The net area of timberland con- 
trolled by this group of approximately 32 owners had decreased 
in the nine years 815,530 acres. 

In Oregon the holdings of the same size had, as a group, 
dropped 959,930 acres between 1910 and 1919 and added 
1,437,580 acres, a net increase of 477,650 acres. The increases 
represent principally the consolidation of small properties. 
Jluch of the timbered area of Oregon is still undeveloped and 
inaccessible for lumber manufacture. Timber values in this 
region are still low. The greater number of large holdings in 
Oregon are in such localities. Several of them have changed 
hands during the past 10 years, some tracts two or three times, 
due to the inability of owners to carry taxes, interest, and pro- 
tection costs any longer. The holdings previously carried more 
or less as a speculation have in many cases passed into stronger 
hands. 

There are still* many thousand timberland claimants and 
small owners in these less accessible regions who are anxious 
to unload ; and the low values at which they are willing to sell 
their land has permitted the blocking of small holdings into 
large properties at prices which have attracted strong investors. 
In a considerable number of cases, companies preparing for 
lumber manufacture have not only blocked up small properties 
but have also purchased extensively from the larger holders 
themselves. A process of concentrating small properties and 
one of breaking down the very large properties are thus going 
on at the same time. These two movements taken together 
presage a change in timber ownership in Oregon from a specu- 
lative to an operating basis and a large increase in its manu- 
facture of lumber. 

The individual holdings under 25.000 acres, or of less than 
about one billion feet of stumpage, aggregate 17,000 in Oregon 
and 7,000 in Washington. Many of these small holdei-s have 
retained their timber not from choice but from their inability 
to sell in locations isolated from present manufacturing centers. 
The smaller number of such holdings in Washington indicates 
the much more rapid development of the lumber industry in 
that State. The enormous number of timber properties of small 
or unimportant size in the two States on the northern Pacific 
coast not only show that there is still a very wide distribution 
of timber owncrshi]) in that region notwithstanding the concen- 



64 



TIMBER DEPLETION, PEICES, EXPORTS, AND OWNERSHIP. 



tration wliicli lias (alien place; but also that the process of con- 
crntradoii for tiiuln'r liokliiig as distinct from luinhcr manufac- 
tnre had been cheeked, as in Idaho. 

TIMBER OWNERSHIP IN CALIFORNIA. 

The timberlands of California illustrated, in 1910, the same 
tendencies toward a partial concentration in enormous holdings 
evident in Oregon and Washington. Nearly 75 per cent of the 
privately owned timber in the State, or 178.2 billion feet, was in 
.30 holdings. The seven largest owners carried 100 billion feet 
of stumpage ; and one owner, the Southern Pacific Railroad, had 
acquired 35 billion feet through its Federal land grant. 

Tlie commercial timber lands of California comprise two dis- 
tinct belts, the redwood forests bordering the coast, and the 
sugar and yellow-pine belt covering the eastern and northern 
mountain ranges of the State. In the redwood region the prin- 
cipal nonoperating owners are now 17 in number, with holdings 
ranging from 200 million to 5 billion board feet of timber. 
Eleven of these holdings comprise 1 billion feet or more ; and 
in the aggregate they comprise 29,056.000,000 feet. The prin- 
cipal operators in the same region are 13 in number, with tim- 
ber holdings ranging from 240 million to 3 billion feet. Six of 
tliese companies have holdings of 1 billion feet or more ; and 
the aggregate ownership of the 13 is almost 20 billion feet. A 
large part of the redwood stumpage that can be operated most 
economically is now controlled by operating companies, who also 
largely control strategic operating sites from the standpoint of 
coastwise or other shipments. There is still a large percentage 
of redwood timber in the ownership of nonoperating companies, 
but the general tendency since 1910 appears to have been away 
from further concentration. The number and aggregate liold- 



ings of the group of companies controlling a billion feet or more, 
for example, has decreased. 

The principal holding companies in the pine region of Cali- 
fornia are eight in number._ Aside from the enormous property 
of the Southern Pacific Railroad, these ownerships range from 
600 million to 3 billion board feet. In addition, there are 14 
large operating companies, one of which controls 15 billion 
feet of stumpage, while the holdings of the rest range from 181 
million to 2.8 billion board feet. All told, these operating com- 
panies own over 29 billion feet of stumpage. There liave been 
several transfers of ownership since the investigaFion made by 
the Bureau of Corporations in 1910; but no important change 
as to the general concentration of timberlands. The present 
tendency in the California pine region is toward the operation 
of timber areas and the liquidation of the investments which 
tliey represent wherever the location of the property permits. 
In line with this tendency, in California as in Oregon, a rapid 
increase in the installation of .sawmills and volume of lumber 
output is to be expected. 
CHANGES IN TIMBER OWNERSHIP FROM 1913 TO 
1918. 

The accompanying table, No. 26, prepared by the Timber Sec- 
tion of the Bureau of Internal Revenue, shows the increases and 
decreases in timber ownership between 1913 and 1918 by 368 
owners. These holdings are distributed by groups through 17 
forest regions, representing practically all of the important 
timber areas in the United States. The figures do not include 
all of the large timber holdings in the regions represented, but 
do, through showing what has happened in the case of a 
-sample group of large owners in each region, draw an excellent 
picture of the tendencies in timber ownership the country over. 



Table 26. — Depletion of limber 



and net changes in timber oivnership of large limber i 
Uniied States. 



in the important forest regions of the 





Number of 


Least 
tity of 


Aver- 
age 

stand 
ner 


Total area 

owned 

(thousands of 

acres). 


Ratio. 

(G+F) 


Timbered area owned 
(thousands of acres). 


Ratio. 
(K-^I) 


Timber owned (mil- 
Uons of board feet). 


Ratio. 
(O.^M) 


Per 
cent of 
Mar. 1, 

1913, 
timber 

cut 
during 
period. 

(N-i-M) 


Per cent by 
which pur 
chases or 
sales dur- 

quantityof 
timber 
owned 
Mar. 1, 
1913. 

(nXm) 


Forest regions. 


Total. 


Not 
aZy. 


timber acre 
owned Mar. 1, 
Mar. 1,1 1913, 
1913, or (thou- 
Dec. 1 sand 
31,1918, fid.lt.). 
(milUon 
bd.tt.). 

i(M-i-I) 

I 


Mar 1 ^^''• 
1913.' i^l. 


Mar.l 
1913. 


d^u-^i 

ing 

period 


Dec. 
31, 
1918. 


Mar. 1, 
1913. 


perlfd. 


Dec. 
31, 
1918. 


A 


B 


C 


D E 


F 


G 


H 


I 


J 


K i L 


M 


N 





P 


Q 


R 


New England 


40 

ri 

5 
11 

7 

B5 

17 
22 

8 

20 

69 

10 
40 
17 

11 
15 


2 

2' 

2 

7 

2 
6 
7 
5 
2 
6 


60 1 3 8 


5,675 
550 


6,519 

821 
645 


1.15 

.96 
.99 


5,386 

782 
166 
862 

745 
4,890 


797 

136 
91 
415 

361 


5,365 1.00 

614 .78 
83 i .50 
504 .65 

592 .79 

3 854 ' 79 


20,522 

3,664 

391419 

3,322 
5,284 

3,681 

2,948 

18,082 

16,082 
98 793 
25,310 
9,568 
21,617 
31,972 


3,255 

755 
1,936 


19,885 

3,620 
1,109 


0.97 

!38 
.65 

.79 

.81 
.66 

.66 

.95 

■^ 
1.00 

:89 


16 

17 
66 
39 

45 
37 

53 

39 
30 


13 


Ne^toA'!:.^.-;."^? 


60 
CO 
250 

2.50 
■250 

60 
60 

100 

250 

250 

250 
500 
500 


5.6 
17.6 
4.3 

3.9 

8.1 

7.5 
8.0 

10.4 

5.6 

7.2 

17.5 
44.0 
• 50.0 
16.0 
78.0 
25.1 












(Va.,N.C.,S.C., Ga.) 
Florida pine 








1,752 2,625 


19 


GuKpine 










(Ala., Miss., La., Tex., 
Arlt.) 
Cypress 












32 


^ (La./FIa., S. C.) 








057 

354 

524 

2,496 

918 
2,245 
503 
f.l6 
278 
1,273 


256 

117 

163 

1,094 

94 
103 
29 
31 
31 
136 


601 

235 

545 

1,634 

902 
2,096 

633 

250 

1,130 


.91 

.66 

1.04 

.65 

.98 
.93 
.92 
1.03 
.90 
.89 




(Va., W. Va., N. C, Ky., 
Tenn.) 








1,441 

894 

7,137 

1,595 
7;495 
1,760 
322 
2,513 
2; 760 


2,418 
2,891 

11,868 
15,228 

9,548 
19,346 
28,605 


5 


(Va.,W.Va.,N.C.,Tenn.) 
Delta hardwoods 


577 
3,724 

2^490 
507 
674 
399 

1,518 


737 

3,675 

1,052 

2,463 

650 

720 

401 

1,505 


1.28 

.99 

1.03 
.99 
.97 
1.07 
1.01 
.99 




(Miss., -M-k., La., Mo.) 




(Minn., Wis., Mich.) 
Idaho 


10 


Washington (fir and pine) 


8 
7 
3 
12 
9 


-5.0 






Caliiornia redwood 














376 


42 




13.7 


18,047 


18,988 


1.05 


22,696 


5,742 


19,560 


.86 


310,469 


53,357 


262,482 


.85 


17 


2 n 







TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



65 



The following notes on this table have been furnished by the 
Timber Section of tlie Bureau of Int«rnal Revenue : 

" In New England the 16 per cent cut indicated in column Q 
is believed to be too low to be fairly representative for all of 
the owners in the region, for during this period many of the 
larger operators, desiring to guard heavy investments in pulp 
and paper manufacturing plants, secured their supplies of raw 
material as far as possible from timberlands other than their 
jwn. At the same time these owners gladly bought additional 
limber to the extent of 13 per cent of their original holdings. 

" In the case of New York the statement just made for New 
Kngland applies to column Q. In the case of column R, how- 
ever, the owners did not increase their holdings through pur- 
chase, but in fact diminished them by one-half of 1 per cent 
through sales, owing to the fact that timberland at the begin- 
ning of the period was for the most part already closely held 
in New York and very little was changing hands. 

•' In Pennsylvania there are very few important timber hold- 
ings left. These are being rapidly exhausted, as indicated by 
the fact tliat 66 per cent of the timber on hand March 1, 1913, 
was cut during the period, and by the further fact that the 
owners were able to secure only 4 per cent more during the 
period. In a region such as this, where cutting has materially 
reduced the supply of virgin timber, the tendency is for an 
operator to replenish his timber reserve, so far as he is able, by 
the purchase of other available timber. For the same reason 
this tendency also obtains in the Atlantic pine, Florida, Gulf 
pine, cypress, Appalachian hardwoods, Appalachian softwoods, 
and Lake States regions. 

" The Atlantic pine region shows about the same situation as 
does Pennsylvania, excepting that the existing supply suitable 
for large sawmill operations is not being exhausted as fast. 

" In the case of Florida, while the rate of cutting was high, 
there were still considerable tracts of timber to be obtained for 
good-sized operations, as indicated by the 19 per cent excess of 
purchases over sales. In the Gulf coast pine region the rate 
of reduction of timber reserves was slightly slower than in the 
.\tlantic pine region ; the opportunity to secure additional tim- 
ber was better but not so good as in Florida. 

'• We now leave the regions of the United States in which the 
timber supplies have been rather heavily depleted and where 
operators are inclined to acquire as extensively as practicable 
additional supplies in order to prevent their reserves from 
falling too raiiidly. We reach the western United States, where 
there are still enormous supplies of virgin timber. Here during 
the period covered by the table there was little inclination to 
buy additional timber because of the exceedingly heavy load of 
timber already carried ; in fact, many owners endeavored to 
liquidate their timber as rapidly as possible both by cutting 
and by selling. Those large owners who bought timber usually 
acquired only that offered at bargain rates. In Idaho, for in- 
stance, 10 per cent of the timber on hand at the beginning of 
the period was cut and 5 per cent acquired ; much more than 5 
per cent could easily have been acquired, for the available sup- 
plies are large, if the owners included in the group had been in 
a buying mood. In W'ashington 8 per cent was cut, and an addi^ 
tional 5 per cent was sold. Similarly in Oregon fir, 7 per cent 
was cut and an additional 7 per cent was sold. In the case of 
Oregon pine, California redwood, and California pine the condi- 
tions were not far different from those just mentioned." 

Particular attention should be given to the ratio columns for 
" Timbered area owned " and " Timber owned." In the case of 
but one group — that of Oregon pine owners — does the total 
quantity of timber owned in 1918 equal that owned in 1913. In 
every other region the total group ownership dropped off dur- 
ing these years. The ratio is close to 100 in most of the regions 
still having large areas of virgin forest, reflecting, first, con- 
tinued opportunity to acquire timber, and, second, the effort on 



the part of the larger owners to maintain a constant but not 
greatly incrpysed supply of stumpage for their mills. 

It is al.so notable that the quantity of stumpage held in 1918 
by the New England group is very close to that held in 1913. 
In several other regions low ratios, such as 38 per cent in Penn- 
sylvania, 0.5 per cent in the Middle Atlantic States, and 06 per 
cent each in the softwood areas of the southern AppaJachian 
and in the Lake States, are evidences of timber depletion. 

These data, compiled from the tax returns made to the Bureau 
of Internal Revenue, confirm the general tendency, ascertained 
by the Forest Service from study in the field, toward a decrease 
in the larger timber holdings in many regions and putting tim- 
ber ownership more largely upon an operating basis. These 
facts, however, do not necessarily indicate a decrease In 
the proportionate amount of timber controlled by large owners. 

A SUMMARY OF THE PRESENT SITUATION AS TO 
TIMBER OWNERSHIP. 

In brief, the situation as to timber ownership has not changed 
materially from that reported by the Bureau of Corporations In 
1910. Half of the privately owned timber In the United States 
is in the ownership or control of about 2.50 large companies. 
About one-fifth of the total is owned by the Government. Sev- 
eral of the Western States also rank as large holders. The 
ownership of the remaining timber is very widely distributed. 
There are 24,000 holdings of less than a billion feet in Oregon 
and Washington alone. The great bulk of the hardwood timber 
is distributed among many owners. It is roughly estimated 
that the farm wood lots in the States east of the Great Plains, 
aggregating 152,000,000 acres, contain two-fifths of the timber 
in this portioi. of the country, or approximately 340 billion feet. 

In nearly every forested region the group totals of the prin- 
cipal owners have either practically remained stationary or 
decreased. The tendency on the part of these groups to acquire 
and maintain a relatively constant supply of standing timber 
as cutting progresses is marked in regions where the remaining 
resources permit. The decrease in the holdings of such groups 
in several of the eastern forest regions is a clear indication of 
timber depletion. In many individual cases, of course, a fur- 
ther concentration of timberlands is in progress. This is par- 
ticularly marked in the softwood forests of the Northeast, 
spurred by the scarcity and high value of pulp woods. 

A realization of the carrying charge on long-term timber in- 
vestments, which may double the capital cost of stumpage 
every seven or eight years, has largely halted the movement for 
building up enormous speculative timber properties which was 
in full swing prior to 1910. The tendency of the present, with 
some exceptions, is to put the timber holding on an operating 
basis, adjusting its size to a practicable scheme for under- 
writing the cost of particular sawmills and logging improve- 
ments rather than carry large surpluses beyond operating re- 
quirements now clearly defined. A number of companies, 
hitherto timber investors rather than lumber makers, are be- 
coming operators through the necessity of obtaining a current 
revenue to meet carrying charges, and also because of the op- 
portunities for profit atTorded by the existing lumber markets. 
As a broad rule, therefore, particularly in the Northwest, tim- 
ber lands are passing over from long-time speculations to blocks 
of raw material connected with particular manufacturing 
plants. As a phase of this process, the largest holdings are 
being reduced rather than increased. 

On the other hand, this regrouping of timberlands is bring- 
ing new interests into the Western States, chiefly as operators. 
While often buying timberland from the larger owners there 
before them or taking over going sawmills, these new interests 
are also consolidating small holdings in order to block up de- 
sirable operating units. They thus become large or compara- 
tively large timber owners themselves ; and their establishment 
in the West tends to even off decreases in the holdings of the 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



viT.v l;u-,;:e iiitere.sls. By iiiul large, the degree of concentration 
indicalcd in llie liiidings of the Bureau of Corporatijjns in 1910 
lias not been appreciably changed ; but no general tendency is 
(■\ident to extend control by increasing the larger holdings or 
l>y withholding timber from the saw. Indeed, the opposite is 
Iruc in many roi^ions. 

Two lactois make the effect of timber concentration greater 
than it ai>pears. The first is the ownership of key areas, 
strategically located at the outlets of valleys or other points, 
where they control to a considerable degree the operation of 
the hack-lying or adjoining timberland. There are many cases 
where topography thus gives the owner of a key tract practical 
control over an adjoining quantity of timber which he may 
confldently expect to purchase more or less at his own terms 
when he i.s ready to log, but whicli meantime must be carried 
by otliers. Under the operation of the timber and stone act 
and otlier land laws, many such tracts have been acquired 
within or adjoining National Forests which in effect control 
considerable quantities of publicly owned timber, and the same 
situation frequently exists as regards private lands. 

A second aid to timber control is the fact that the holdings 
of many, though not all, of the large owners comprise the most 
accessible timber in their regions, the timber most cheaply 
logged, and the timber of the best quality. A considerable 
part of the western stumpage is so inaccessible and costly to 
log that it will not be a competitive factor in the lumber market 
for many years. This is true, particularly, of much timber in 
the National Forests. Control of the more accessible and high- 
grade timber will strengthen the position of many large inter- 
ests aside from the actual volume of stumpage which they own. 

CONCENTRATION TENDENCIES IN LUMBER MANU- 
FACTURE AND MARKETING. 

The most significant tendencies during the past five or six 
years bearing upon the general question of timber concentra- 
tion, however, are not in the ownership of stumpage, but con- 
cern a more highly organized control of sawmills and lumber 
marketing by groups of operations. During the same period the 
industry has become more closely knit through the development 
of regional associations and other cooperative measures. The 
census of 1910 reported some 45,000 operating sawmills. The 
study made by the Forest Service in 1914 indicated that the 
lumber industry at that time was very individualistic in char- 
acter. An enormous number of mills, large and small, operated 
independently, and the vast majority of lumber-making estab- 
lishments manufactured and marketed their products as compet- 
ing units. The sawmill capacity of the country was much 
greater than the volume of lumber which could be marketed. 
The bonded indebtedness of the industry was large and, in gen- 
eral, its financial structure was weak. The pressure of carry- 
ing charges on timberlands and indebtedness and on investments 
in manufacturing capacity too large for the market led to fre- 
quent periods of overproduction and of financial distress to 
many operators. 

The change from these conditions which now appears to be in 
progress may be compared to the clianges in the iron and steel 
industry during the period when the small foundries and steel 
plants were disappearing or being consolidated in a compara- 
tively few large groups ; or to the changes in the transportation 
industry during the period following 1870, when many small 
railroads were absorbed into large trunk systems. These ten- 
dencies in the lumber industry may be summarized as follows : 



The necessity of manufacturing lumber in the vicinity of 
standing timber prevents the geographical concentration of 
plants to any degree comparable with most other manufactures. 

Nevertheless, there is a distinct tendency, particularly in the 



\\'('s(<'in Slates, luward concentration of production tlirough 
I lie ccnli-ul Clint ml uf a considerable group of mills. Such con- 
trol may he exercised through varying degrees of stock owner- 
ship, bonding or other financial velations, or affiliations of one 
form or another. These operating groups range from 2 or 3 
sawmills to 12 or more, with a combined cut of from two to 
three hundred million board feet yearly up to a billion feet. 
In several instances the group includes mills in two or more 
of the principal softwood regions — the South, the Lake States, 
and the Northwest, and in souk! cases also embraces mills or 
timber properties in British Columbia or Mexico. 

The movement of southern lumber interests into tlie Western 
States is one of the significant phases of this tendency in lum'- 
ber manufacture. Several of the large southern operators have 
recently acquired mills or timber properties in the West. In 
some cases this represents an expansion of existing lumber- 
producing organizations ; in others, the migration into new 
territory of operating units which have exhausted their former 
timber holdings. 

With the development of such operating organizations there is 
a certain elimination of sawmills and timber holdings whicii 
hitherto have been unaffiliated. The tendency of the large 
operating groups is to consolidate the lioldings, large and small, 
in their vicinity and thus acquire sufficient stumpage to supply 
their manufacturing plants tor at least 20 or 25 years. The 
relation of the small mill to this general movement is a complex 
one and, as will be indicated later, works in different ways in 
different regions. But as regards the principal remaining 
timber resources of the United States in the West the present 
tendency is unquestionably toward a closer concentration of 
lumber manufacture in large units than has existed hitherto. 

This development toward more large and powerful operating 
groups is but partial. The number of sawmills operating as 
independent units is still very large and still manufactures 
the greater part of the total lumber cut. Furthermore, as 
far as present indications go, the entrance of new organizations 
of large size into the lumber industry of the West has not 
tended to restrict competition. The newcomers, usually well 
organized, efficient, and well financed, have indeed in several 
instances introduced a new competitive element in the regions 
where they located. This tendency in the lumber industry 
undoubtedly would make a process of " getting together " 
between the larger interests easier than it has been before, 
but it at least is not yet evident. 

GREATER FINANCIAL STRENGTH OF THE LUMBER INDUSTRY. 

The study of the lumber industry in 1914 indicated that its 
financial .structure was weak. Incomplete records of bonds 
and other forms of indebtedness on timber lands and opera- 
tions in the southern pine region and the West aggregated 
.?151,000,000. Stockholders' loans, current bank loans, and 
other forms of borrowing apparently had been carried often 
beyond the point of safety. Interest and maturities on the 
various forms of indebtedness formed a heavy charge upon tlie 
average thousand feet of lumber manufactured, and notably 
forced many savi'mills to continue cutting during periods when 
operation represented an actual loss and increased the over- 
production which occasioned periodic demoralization of the 
industry. In the three years following 1912 there was a weed- 
ing out of weaker operators as a result of these conditions, and 
certain of the large timber holdings in the Northwest were 
broken up and passed into other control owing to the attempt 
to carry bonds and other forms of indebtedness beyond the 
capacity of the business. 

Within the last four years the financial strength of the 
lumber industry had radically improved. A lai'ge volume of 
timber bonds has been retired. The flow of eastern capital, 
particularly from the Southern States, into western timber re- 
gions has eliminated a certain number of weakly financed timber 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



6' 



owners and sawmill operators and has strengthened the finan- 
fial backing of other concerns where no change in ownership 
was made. Higher profits in the manufacture of lumber dur- 
ing the past few years have enabled the industry, by and large, 
to wipe out much old indebtedness and greatly improve its 
financial situation. 

This change is cited because it Is part of the general recon- 
struction of the lumber business whicli is tiilving place, thus 
making it a better organized industry, and which tends to elimi- 
nate certain conditions which formerly made this industry one 
of the most highly competitive in the country. The indebted- 
ness of timber ownei-s and lumber producers was formerly a 
large factor in keeping up production with little reference to 
demand, and in causing the scramble to market the lumber cut 
at almost any price. To a considerable extent the lumber in- 
dustry now appears to be passing out of a condition where ex- 
cessive competition was forced upon a large portion of its mem- 
bers by purely financial exigencies. 

The fact remains that the nature of timber properties tends 
to compel the operator to manufacture lumber steadily at the 
full capacity of his plant and to dispose of his product cur- 
rently as it is sawn. This results from the cost of carrying large 
supplies of raw material. The " stumpage load " has forced 
many timber owners in the West to become operators, and the 
very necessity of liquidating timberland investments compels 
continuous operations. 

The carrying charges on timberland thus tend to keep the 
lumber Industry competitive. In 1914 they compelled many 
nulls to operate at a loss — for operation was still less costly 
than idleness. The greater financial strength of the lumber in- 
dustry will minimize the effect of this basic factor to some ex- 
tent, but can not eliminate it. Once let lumber stocks equal or 
exceed the demand and it would again become a powerful com- 
petitive influence. Another safeguard against possible monopo- 
listic tendencies in lumber manufacture is the public owner- 
ship of a third of the timber in the Western States, in the Na- 
tional Forests. The sale of public stumpage under the restric- 
tions enforced will foster independent mills not affiliated with 
the large interests. 

CONCENTRATION OF LUMBER MARKETING. 

Probably the most significant phase in the reorganization of 
the lumber industry is the development of large marketing 
units which handle the output of a considerable number of 
plants, under central control. This has gone considerably be- 
yond the concentration of production through the control of 
groups of mills. A lumber sales company in the Northwest 
markets approximately a billion board feet yearly, cut by 11 
affiliated sawmills. An agency in New York sells the product 
of 11 southern mills, amounting to some 200 million board feet 
annually. The second of these examples is much more typical 
than the first. There are many other groups of mills whose cut 
is marketed jointly under management which may be identical 
with the ownership or affiliation of the mills themselves or 
which may, in the form of a selling agency, be largely or 
wholly unconnected with the producing plants. One of the 
most common is. the type of selling agency which markets the 
cut of 12 or 15 small mills -on a commission basis, giving the 
mills a more efficient selling department than they individually 
could afford. 

The ■' line-yard " system of retailing lumlier, although fol- 
lowed for a. good many years, is an indication of the same 
movement toward a closer organization of lumber marketing. 
In many cases large sawmills or groups of sawmills under the 
same financial control maintain their own lines of. retail lumber 
yards or are financially affiliated with companies operating 
line-yard systems. The large wholesaler who contracts for the 
entire cut of a number of mills, or the entire cut of certain 



grades of lumber, is another factor. Many small mills, par- 
ticularly in the Southern States, while seemingly independent 
operating units, are in fact grouped into relatively large market- 
ing units through a single wholesaler who handles their prod- 
uct ; and in many cases these small mills are partly or largely 
financed by the wholesaler who markets their cut. 

The movement in this direction, while only partially con- 
nected with the ownership of timberlands, is undoubtedly the 
most pronounced feature of concentration in the lumber in- 
dustry from the standpoint of tendencies in its development and 
their bearing upon the Interests of consumers. Concentrating 
the marketing of lumber into large units is still far from com- 
plete. The 40,000-odd sawmills scattered all over the United 
States do not lend themselves readily to such a process. 
Furthermore, the number of distinct marketing units, even those 
of large size, is still very considerable, and the proportion of 
the lumber cut of the country handled by the largest of them 
is relatively small in comparison with other industries. The 
largest uuil: of this character, for example, markets about 3 
per cent of the lumber cut of the country. In particular reg- 
ions the proportionate control of lumber distribution by a 
particular organization may be much greater, and the policy 
of the organization as to local sales of the products handled 
by it of corresponding importance to the interests of the con- 
sumers. 

In the general lumber trade the large selling organization 
has often been a strong competitive factor. Reaching out for 
more business, it has not infrequently brought effective com- 
petition into regions where formerly it was lacking and given 
better service to consumers in such ways as stabilization of 
lumber grades, offering nev? grades or dimensions especially 
adapted to local requirements, or furnishing plans for the con- 
struction of dwellings and farm improvements. In itself this 
form of organization may be beneficial rather than harmful to 
the public interests, particularly in an industry like lumber 
manufacture, which has been backward in the development and 
adaptation of its pi-oducts to the requirements of consumers. 
The danger lies in the possibility of using large marketing 
units as a medium for price control. 

DEVELOPMENT OF TRADE ASSOCIATIONS. 

Regional associations of lumber manufacturers have been 
in existence for many years. They have discharged certain 
functions of value both to producers and consumers of lumber, 
particularly in the standardization of lumber grades enforced 
by association Inspectors and in correcting evils common in 
the industry to which its product is particularly susceptible 
through various practices of misgrading. The associations have 
also largely handled the traffic interests of their members and 
have been the media through which various forms of statistical 
and other information are assembled and distributed to the 
lumber producers comprising them. 

The general reorganization of the lumber industry has in- 
volved inevitably an expansion in the activities of such asso- 
ciations and has given them greater influence upon both the 
production and marketing of lumber. They have given em- 
phasis, for example, to the formulation and adoption of uni- 
form accounting systems, tending to unify the accounting prac- 
tices of lumber manufacturers, which in former days were ex- 
tremely diverse and often haphazard and inaccurate. They 
have been the foremost promoters of the movement for guar- 
anteeing the quality of lumber products. Another activity, 
developed particularly during the last .six or eight years, is 
the assembling and distribution among members of the asso- 
ciation or of a subsidiary organization of current reports on 
the prices received in lumber sales. The purpose of this work 
is to give the members of the association a common and up-to- 
date understanding of the market which they are supplying. 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



iKiiorance of current market values, particularly on the part 
(il small operators, has been one of the reasons for the very 
\i!istable conditions often prevailing in the lumber industry. It 
w ;is evidenced and is still to some extent evidenced by the wide 
nuiije in prices at which the same grade of lumber is sold in 
I he same locality. 

With lumber manufacture and marketing so widely dis- 
liibuted, the industry has lacked a central medium for re- 
IKirting price changes from day to day, like the wheat or cotton 
exchanges. No general and authoritative price data have been 
:ivailable to it, like those assembled and published by the De- 
Iiiirtment of Agriculture on many agricultural products. The 
function of the regional lumbermen's association in assembling 
and distributing the prices reijorted on current sales has 
yrown out of a real need on the part of many operators for 
better information about their market. It is a development 
common, in one form or another, to most of the large businesses 
of the country. 

Solely as a matter of information, the current distribution of 
prices received by different members of the association tends 
ti) unify the rates at which lumber is offered for sale and 
to make increases or decreases in accordance with the fluctua- 
tion in the market more nearly similar at all producing plants. 
The same information would doubtless be of equal value to 
buyers of lumber, particularly to the smaller buyers less able 
to keep posted upon market fluctuations, if available to them. 
'I'he price reports of lumber associations appear to have been 
made available to lumber buyers in some cases, in other cases 
not. 

The assembling and distribution of such information obvi- 
ously forms a possible vehicle or medium for reaching more 
or less definite agreements or understandings controlling the 
prices at which lumber is offered. The extent to which it may 
serve as such a medium depends upon the policy followed by 
the particular association as to the degree of publicity given 
to data of this character, upon the efforts which the association 
may miike to induce its members to price their product in con- 
formity with the highest rates shown by current reports, and 
upon the extent to which the individual lumber producers or 
selling organizations may use the data as a basis for price- 
control agreements or informal understandings. Properly 
employed, particularly with a large degree of publicity, such 
information should serve to stabilize the lumber market to the 
advantage of both producer and consumer. 

EFFECTS OF TIMBER DEPLETION UPON 
CONCENTRATION. 

It should be pointed out that the public effects of the con- 
eentration of a large part of the virgin forests of the United 
States in the hands of relatively few large interests will be- 
come greater as forest depletion continues. It is to the interest 
of large operators who have raade extensive investments in 
operating plants and in marketing organizations and who have 
built up widespread trade connections to maintain a continuous 
supply of sluiiipage for their mills. Carrying charges have 
placed more or less definite limits upon the quantities of re- 
sei-ved timber which can be carried economically. As these 
quantities are reduced by cutting, however, it is to be expected, 
and tlie data on hand indicate, that the large operators will 
replenisli them by purchasing available small holdings. As a 
general rule, the small mills are tending to be eliminated in the 
western regions, where tlie principal bodies of virgin timber 
remain. This process may be expected to continue in such 
regions for a considerable period, first, because in many in- 
stances the small plants are less efficient in manufacturing 
and marketing lumber and are, the first to be eliminated dur- 
ing periods of depression ; secondly, because by and large 
they will be the first mills to exhaust their timber holdings; 



and, thirdly, because the large interests will find it to their 
advantage as time goes on to acquire tiie smaller tracts of 
stumpage available to their plants. Financial strength, 
strategic location, ownership of the most accessible timber, far- 
reaching aflJiliations of one form or another, including in some 
instances affiliations with transcontinental railroads — all of 
these factors will tend to give the large interests in the North- 
west a greater and greater degree of control of the situation. 
This control will increase for a considerable period in about the 
same ratio as forest depletion goes on, and to a corresponding 
degree will involve the dangers to the public interest arising 
from a natural monopoly. 

One of the most important aspects of this control, as already 
pointed out in the case of the virgin pine timber remaining in 
the Southern States, is that it will extend particularly to the 
timber of high quality still left in the steadily reduced areas of 
old growth. An increasing concentration of high-quality tim- 
ber, particularly in the softwood forests of the South and West, 
may be expected. 

On the other band, a point is reached in every lumber-produc- 
ing region, after the bulk of its virgin timber has been ex- 
hausted, when the large plant and organization are no longer 
the most efficient economically and when the large sawmill, 
carried by its square miles of virgin stumpage, is replaced by a . 
smaller and more portable operating unit. The small miUs 
follow large ones, picking up odds and ends of virgin timber, 
cleaning up the less accessible, and ultimately operating on 
second-growth stands, which produce ordinary grades of build- 
ing lumber and other products of relatively low quality. This 
process now appears to be taking place in the southern pine 
States. During the next 10 years the closing down of large 
sawmills in that region will be rapid. At the same time the 
number of small mills is rapidly increasing. These small mills, 
often operating but a few years at one point, are much less 
adapted to centralized control and represent a tendency to break 
up concentration. This tendency may be offset to a degree by 
the common marketing of tlie products of a number of small 
mills through a wholesaler or some form of selling agency and 
through financial affiliations which may grow out of this mar- 
keting relationship. 

In other words, the lumber industry is distinctive in that the 
concentration or possible concentration of its raw material is 
necessarily limited in time. Under present nwthods of opera- 
tion the physical conditions restrict the life, even of many large 
plants, to 20 or 25 year.s. This broad rule has been true of the 
dominance of the lumber markets of the United States by the 
large softwood regions, each of which has held control of the 
markets for a comparatively short time. The ultimate tendency 
is for the industry to break up into small units under which the 
possibility of concentration is greatly reduced. 

The most significant factor in the present situation is that 
with the exhaustion of virgin timber in most of the eastern 
States and its inrpending exhaustion in the southern pine re- 
gion, although certain large mills will be cutting virgin yellow 
pine for 30 years to come, the danger of concentration of high- 
grade tinihor is proportionately greater than ever before. The 
gi'eatest protection which the people of the United States have 
against such concentration lies in national and other public for- 
ests, where such timber can be grown or held in reserve and 
which are so administered as to aid in maintaining competitive 
conditions in the lumber business. One of the most effective 
steps that can be taken to limit the effects of concentration is 
not only to extend the National Forests by purchase but to in- 
corporate in them all tiniberlands which the Federal Government 
still owns or controls and not to permit a single additional acre 
to pass into private ownership. 

As to our requirements for lumber of general utility, the 
danger of harmful concentration is more remote. It would be 
dispelled by vigorous action to stop forest devastation and re- 



TIMBEK DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



69 



stock denuded lands, leading to permanent forest industries 
widely distributed over tiie couutrs, and tending toward small 
rather than large operating units. 

No information has been obtained to justify a conclusion 
that the tendencies toward a closer knit organization of the 
lumber industry and various forms of concentration have led, 
up to the present time, to actual monopolistic conditions of 
general scope. It has been impossible in the limited time avail- 
able for this investigation to make a study of that phase of the 
situation. The particular facts which it is believed are clear 
are that the lumber industry in the regions where the principal 
supplies of timber remain is growing away from the loose, un- 
organized, and highly competitive conditions which prevailed in 
1914; that while during the past 10 years there has been no 



material change in the concentration of ownership of standing 
timber, the effects of concentration will become more apparent 
as time goes on, particularly in respect to products of high 
(luality; that the financial weakne.sses which hitherto have 
tended to keep the lumber manufacturing industry in a highly 
competitive condition are to some extent disappearing; and 
that the lumber industry in the regions of large forest resources 
is in a process of partial reorganization into larger units of 
production and marketing. In other words, some of the factors 
tending to make this industry highly competitive are changing 
into conditions more favorable to closer control. The necessity 
for the steady liquidation of timber investments and the still 
enormous number of operating units are inherent factors un- 
favorable to close control. 



FOREST DEPLETION THE FUNDAMENTAL PROBLEM. 



CUMULATIVE EFFECTS OF TIMBER DEPLETION. 

From the facts presented in this necessarily Incomplete re- 
Ijort it is evident that the fundamental weakness in the supply 
and cost of wood products in the United States is the cumula- 
tive depletion of our forests. The extent and broad effects of 
the steady wiping out of the original forest resources of the 
country are readily grasped. Three-fifths of our primeval for- 
ests are gone. The timber remaining is being consumed four 
times faster than it is being replaced. With the exhaustion of 
several of our principal forest regions as large producers of 
wood products, occurring successively in the Northeastern 
States, the Alleghenies, the Lake States, and the Atlantic sea- 
board, and the similar exhaustion of the Gulf State pineries 
now inmiinent, the cost of transporting forest products to the 
average consumer in steadily rising. Not only does the widen- 
ing distance between the average sawmill and the average lum- 
ber user, between the average tract of pulpwood and the aver- 
age newspaper, impose an increasing charge for freight ; by 
eliminating former sources of supply and competition it ac- 
centuates the evils of abnormal price and transport conditions 
such as the country is now experiencing. 

In other words, the effects of forest depletion are felt not 
only, indeed not chiefly, in the diminution of the total quantity 
of timber remaining. Its injury is felt particularly through 
the process of regional exhaustion through a location of the 
timber still remaining so- restricted as greatly to reduce its 
availability to the average user of wood. It involves all the 
elements of higiier freight costs, more restricted competition, 
dependence upon the efficiency of transportation, dependence 
upon climatic or labor conditions in restricted regions, and 
innumerable difficulties in getting needed materials of tlie right 
kind and at the right time. If all the timber in the United 
States were cut and our needs supplied by imports from South 
America and Siberia, the situation would differ from that 
which we are now rapidly aijproaching only in degree. The 
effect of regional timber exhaustion may be compared with 
what would happen if the orchards and truck farms in the 
Eastern and Central States disappeared and the housewife had 
lo obtain the daily nece-ssities of her table from Florida and 
California. 

One of the first effects of the depletion of our virgin forests 
is the scarcity of timber products of high quality. This has 
already reached a serious stage in the United States, particu- 
larly in respect to the high-grade hardwoods which were among 
the most valuable and distinctive of our original forests. An 
increasing shortage of such products as compared with their 
normal consumption must be expected. Not only will their 
prices be high but it will be increasingly difficult to obtain 
many of then in the quantities required by American manufac- 
turers at any price. 

TIMBER DEPLETION AND LUMBER PRICES. 

Timlier depletion, while not the primary cause, is an im- 
portant contributing cause of high prices. The large curtail- 
ment in lumber production in many regions, due to the cutting 
out of their forests has not only made the consumer pay more 
for his lumber in the form of freight but has enhanced the 
effects of congestion in transportation and of climatic and other 
factors causing temporary curtailment of output in the regions 
which still support a large lumber industry. It has restricted 
70 



opportunity for competition and thereby increased the oppor- 
tunity of the manufacturer or dealer to auction his lumber 
stocks for higher prices. This is at least one reason why con- 
sumers of lumber in Pittsburgh are in some instances paying 
40 per cent more than consumers of the same material in Port- 
land, Oi-eg., over and above the freight charge between those 
points. 

If the war had been fought 40 years ago and had brought 
the same aftermath in all particulars, it can not be doubted 
that the presence of a large lumber-producing industry at that 
time in the Lake States, in the hardwood forests of the Central 
States, in New York and the northern Alleghenies, and on the 
Atlantic seaboard would by the very extent of regional compe- 
tition and the better distribution of transportation have afforded 
a curb on the upward movement of lumber prices which did not 
exist in 1919. The continued depletion of our forests will con- 
tribute to similar sharp increases in lumber prices in time of 
tran.si)ortation or other crises and will also lead to high price 
levels under normal conditions. 

Whatever the precise effects of timber depletion upon recent 
prices, whatever the tendencies in the lumber industry, there 
can be no question that the real solution is to grovi' and protect 
forests. 

IDLE FOREST LAND. 

The depletion of timber in the United States has not resulted 
primarily from the use of our forests but from their devasta- 
tion. The kernel of the problem lies in the enormous areas of 
forest land which are not producing the timber crops that they 
should. There are 326 million acres of cut-over timberlands lu 
the United States. Their condition ranges from complete devas- 
tation, through various stages of partial restocking or restocking 
with trees of inferior quality, to relatively limited areas which 
are producing timber at or near their full capacity. On 
SI niillion acres there is practically no forest growth. This is 
the result of forest fires and of methods of cutting which de- 
stroy or prevent new timber growth. There were 27,000 re- 
corded forests fires in 1919, burning a total of 8i million acres. 
During the preceding year, 25,000 fires burned over lOJ million 
acres of forest land. An additional large acreage was burned 
each year, of which no record could be obtained. 

The area of idle or largely idle land is being increased by 
from 3 to 4 million acres annually as the cutting and burning 
of fore.sts continue. The enormous area of forest land in the 
United States not required for any other economic use, esti- 
mated at 463 million acres, would provide an ample supply of 
wood if it was kept productive. Depletion has resulted, not 
from using our timber resources but from failure to use our 
timber-growing land. 

Nor does this situation exist simply in the less developed and 
thinly settled regions of the country. The State of Massachu- 
setts, as a typical example, contains denuded forest lands 
within a .stone's throw of her dense population and highly de- 
veloped industries, which have been estimated at 1.000,000 acres 
and which are largely idle as far as growing wood of economic 
value is concerned. 

A NATIONAL FORESTRY POLICY. 

A remedy for this appalling waste must be found in a con- 
certed effort to stop the devastation of our remaining forests 
and to put our idle forest lands at work growing timber. It is 
inconceivable that the United States should forfeit the eco- 



TIMBER DEPLETION^ PRICES, EXPORTS, AND OWNERSHIP. 



71 



nomic advantage of its enormous timber-growing resources, 
and that it should go on using up its forests with no provision 
for growing more until wood products are priced on the basis 
of imported luxuries and their use is restricted to the lowest 
possible scale of civilized existence. The concerted action neces- 
sary to put an end to forest devastation must enlist the Na- 
tional Government, the respective States, and the landowner. It 
is impracticable to nationalize all of the forest land in the 
country, or even the major portion of it. On the other hand, 
the results needed can not he attained if timber production is 
k^ft to the initiative of the private owner of land or is sought 
solely through compulsory regulation of private lands. Not only 
has the public very large interests at stalje which justify an 
assumption of part of the burden ; certain fundamental causes 
of forest devastation can be removed only by public action. 
Chief among tliese are the fire hazard of forest properties, par- 
ticularly of growing forests, and a property tax system which 
discourages or may prevent the landowner from engaging in the 
business of growing timber. 

On the other hand, the public can not and should not do It 
all. A measuEfi of responsibility rests upon the land owner, 
and should be recognized in equitable requirements in handling 
his land. It is a case of the public and the private owner 
alil^e doing their part. Our policy must aim toward timber 
production on somewhat the same footing as in France or 
Scandinavia — as an established national practice. This calls 
for a coi-e of public forests, public instruction and example, 
tjublic encouragement in protection and taxation, and a respon- 
sibility recognized by forest o^^^lers to keep their hinds pro- 
ductive. This report would not be complete without indicating 
the essential steps which should be taken to stop timber de- 
pletion. The plan here outlined is built up on the belief that 
the most rapid progress will be made by utilizing the recog- 
nized police powers of the several States to stop forest fires 
and bring about better handling of privately owned forest 
land. The equitable adjustment of tiniberland taxes in such 
ways as will promote timber production is a responsibility of 
the individual States. At the same time the national im- 
portance of stopping timber depletion calls for the taking of 
an active part by the Central Government, particularly in 
aiding the forest activities of the States, standardizing tech- 
nical practice in fire protection and forest renewal, and largely 
extending national acquisitions of forest land. 

THE FEDERAL LEGISLATION NEEDED. 

The Federal legislation needed nuiy be sunmiarized briefly 
as follows : 



Le^^'isUition is needed, as an extension of section 2 of the act 
of March 1, 1911 (Weeks law), which will enable the Forest 
Service to assist the respective States in fire protection, methods 
of cutting forests, reforestation, and the classification of lands 
as between timber production and agriculture. It should carry 
an initial annual appropriation of not less than ,$1,000,000, ex- 
pendable in cooperation with the States, with a proviso that 
the amount expended in any State during any year shall not 
exceed the expenditures of the State for the same purposes. 
The Secretary of Agriculture should be authorized, In making 
such expenditures, to require reasonable standards in the dis- 
posal of slashings, the protection of timbered and cut-over lands 
from fire, and the enforcement of equitable requirements in 
cutting or extracting forest i)roducts which he deems necessary 
to prevent forest devastation in the region concerned, and to 
withhold cooperation, in vihole or in part, from States which 
do not comply with these standards in their legislative or ad- 
ministrative measures. Federal activities under this law should 
not be restricted to the watersheds of navigable streams but 



should embrace any class of forest lands in the cooperating 
States. 

This law greatly extending the very limited Federal aid now 
given to the States in fire protection, will enable the Forest 
Service to organize and carry forward a nation-wide drive 
against the chief cause of devastation — forest fires — and to fol- 
low fire protection with such other measures as may be needed 
in particular forest regions to stop denudation. It will also aid 
States and private owners in restocking lands already denuded, 
where tree growth will not come back of itself. 



Legislation is needed, in part as an extension of section 1 
of the act of March 1, 1911 (AA'eelcs law), which will permit 
the rapid enlargement of the National Forests and the consoli- 
dation of existing forest units for more effective administration. 
This legislation should : 

(1) Continue the purchase of forest or cut-over lands, as ini- 
tiated under the Weeks Act, with annual appropriations of at 
least $2,000,000. 

(2) Authorize the Secretary of Agriculture to exchange Na- 
tional Forest land, timber, or transferable timber certificates for 
private timbered or cut-over land within or adjoining existing 
National Forests. 

(3) Withhold from any form of alienation, except under the 
mineral laws, all lands now in Government ownership or control 
but not embraced in National Forests or National Parks, includ- 
ing canceled patents or grants, unreserved public lands, and 
Indian and military reservations, which are valuable chiefly 
for the production of timber or protection of watersheds, and 
all lands of similar character hereafter revested in or acquired 
by the United States, and authorize the President, upon recom- 
mendation of the National Forest Reservation Commission or 
otherwise, to incorporate such lands in National Forests. 

About a fifth of the forest land in the United States is 
now publicly owned. One of tlie most direct and effective 
means of arresting devastation and offsetting tlie dangers aris- 
ing from concentration of timber in private ownersliip is the 
extension of publicly owned forests. It is, under present con- 
ditions, the only effective means for overcoming tlie depletion 
of old-growth timber of high quality and for restocking many 
denuded areas which require planting. 

The public should own a half of the timber-growing land in 
the United States, well distributed through all the principal 
forest regions. Every encouragement should be given to the 
States and to municipalities to acquire forest land, but the 
Federal Government must take the lead. In all Federal acquisi- 
tions there must be an equitable compensation to communities 
for the tax returns of which they are deprived. 

Appropriations tor the purchase of forest lands should be 
used, first, to complete the program laid out for the protec- 
tion of the watersheds of navigable streams under the Weeks 
Act, through acquiring about 1 million acres in New England 
and about 5 million acres in the southern Appalachians, and, 
second, to acquire cut-over land, not necessarily upon important 
watersheds but distributed through all the principal forest 
regions where areas suitable for Federal management can be 
obtained. Much desirable timber-growing land in the vicinity 
of existing National Forests can be acquired by exchange from 
National Forest timber or timber certificates, and the adminis- 
tration of the National Forests will be improved and simplified 
througli such consolidation. As part of this policy it Is of 
the utmost importance that all timber-growing land and land 
valuable chiefly for watershed protection which the Govern- 
ment now owns or controls or in any manner may acquire 
shall be withheld from other disposition, with a view to its 
incorporation in National Forests. An elTective administrative 
agency for carrying out this policy and for determining the 



72 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



best means of liquidating existing equities in such lands, as 
in tlie case of Indian reservations, now exists in the National 
Forest Reservation Commission, representing three executive 
departments and both Houses of Congress, which passes upon 
purchases under the Weelis lavt^. 

THE KEFORESTATION OF DENUDED FEDERAL LANDS. 

The current appropriations of tlie Forest Service should pro- 
vide for the progressive reforestation of denuded lands in 
.N'ational Fore.sts, to be completed in not more than 20 years, 
witli a yearly sum beginning at Jf.'iOO.OOO and increasing to 
.$1,000,000 as soon as the work can be organized on that scale. 

Tlie National Forests contain several million acres of forest 
laud so severely burned that it can not be restocljed without 
planting. To restore this land to timber production is an im- 
mediate Federal responsibility. Tree planting is most urgent 
on denuded watersheds from which water is obtained for power, 
irrigation, or municipal use. The work already done by the 
Forest Service has established methods, costs, and the limits 
of successful reforestation by artificial methods. This project 
can, therefore, be undertaken upon an assured basis of costs 
and re.siilts. 

A STUDY OF FOREST TAXATION AND INSURANCE. 

Legislation carrying a moderate appropriation is needed 
which will authorize the Secretary of Agriculture to study the 
effects of the existing tax methods and practices upon forest 
devastation, to devise model laws on forest taxation, and to 
cooperate with State agencies in promoting their adoption. The 
same law should authorize a study of forest insurance looking 
to the assembling of authentic data on risks, practicable forms 
of insurance, the distribution of losses, etc. 

The annual property tax is not adapted to lands employed in 
growing 50 or 75 year timber crops, and is an important cause 
of forest devastation. While land taxes rest with the States, 
the Federal Government can do much to further wise changes 
by an authoritative investigation and the formulation of 
equitable tax laws adapted to timber-growing land. While for- 
est insurance must be developed largely by private initiative, 
investigation will be of material help in promoting this impor- 
tant aid to timber growing' by private land owners. 

THE SURVEY AND CLASSIFICATION OF FOREST RESOURCES. 

Legislation is needed, with an appropriation of .$3,000,000, to 
lie available for from two to four years, as the work may re- 
quire, which will permit the Secretary of Agriculture to survey 
the forest resources of the United States, determine the present 
volume, together with the present and possible production of 
each class of timber in every important forest region, and ascer- 
tain the requirements as to quantity and character of timber 
of each State and of every important wood-using industry. 
This survey should mark out, by broad lines, timber-growing 
land from land suited to farm crops to the end that the forest- 
gi-owing resources of the United States may be fairly estimated 
and utilized in consideration of other land uses. Senate bill 
3555, for the survey of pulpwoods, covers part of the compre- 
hensive investigation necessary. 

Exact information upon timber stands or growth and upon the 
areas of forest as distinct from agricultural land is not to be 
had. It is essential for developing a national forest policy de- 
signed to supply timber of the kinds and in the quantities and 
places needed by the country. 

CURRENT APPROPRIATIONS FOR FOREST RESEARCH. 

The current appropriations of the Forest Service should be 
sufficient to maintain experiment stations in all the principal 
forested regions of the United States. 

Further research is not necessary to determine the urgency 
of tbe action proposed. But a continuous study of the technical 



phases of reforestation in the principal timber regions, with 
their tremendous diversity of forests and methods of forestry 
practice, is essential to carry the national policy forward to 
llie best results. Recent cuts in congressional appropriations 
will neces.sitate closing the four exTJeriment stations hitherto 
I'stablished in the Western States. Not only should those sta- 
tions be restored, but provision should be made for additional 
exiieriment stations covering the other important forest regions 
(if the country. 

The survey of forest resources should be undertaken at once ; 
l)ut the essential facts as to timber depletion and its causes 
are so clear that no time should be lost in enacting the legisla- 
I ion recommended, particularly for cooperation with States and 
the extension of National Forests. The first point of general 
:ittack in arresting devastation is to stop forest fires. Hence a 
law permitting effective Federal and State action in this matter, 
ns already outlined, is of the greatest urgency. 

THE STATE LEGISLATION NEEDED. 

The State legislation necessary to stop forest devastation will 
necessarily vary in different regions. Certain esSentinl features 
(if such laws, however, are common to all of the States contain- 
ing large forest areas. The more important of them may be 
stated briefly as folhiws: 

FIRE PREVENTION AND REFORESTATION OF PRIVATE LANDS. 

State laws should provide for the organized protection of all 
forest lands in the State during periods of fire hazard, the pro- 
tected areas to include all cutover and unimproved land, as 
well as bodies of timber. The protective system should include 
patrols during dry weather, lookout stations; fire breaks and 
idads where effective, and organized fire-fighting forces. Every 
.'■(irest owner, large or small, should bear his proportionate 
sliare of its cost, about half of which may be properly borne by 
I he State itself with the aid of the Federal Government. Police 
i-egulations for the control of fire during dry periods, in con- 
nection with railroad or industrial operations near forest land, 
land clearing or slash di.sposal, hunting, etc., and for the con- 
trol of incendiarism, form an essential feature of the protective 
system. 

State laws should establish the responsibility of owners of 
lorest land for complying with such equitable requirements as 
may be determined upon and promulgated by the proper State 
iigency, dealing with precautions against forest fires, the dis- 
jiosal of slashings, methods of cutting timber or of extracting 
]iarticular forest products, such as naval stores or pulpwood, 
and such other equitable requirements as the authorized State 
agency shall determine upon as necessary to prevent devasta- 
tion. All timbered and cutover land in State or private owner- 
sliip which is not now required for other uses than timber 
growing should be classed as " forest land " and placed under 
tlie control of the State forest organization as far as it deems 
measures of control necessary to prevent devastation. 

The agency in each State charged with the administration of 
the laws dealing with forest fires and devastation preferably 
siiouid be a nonpartisan commission exercising wide latitude 
under the general authority of the State in determining equi- 
table regulations applicable to various classes of forest lands. 
It should have authority, backed by penalties prescribed in the 
law, to enforce its regulations, subject to appeal by landowners 
to a- judicial review. It should have authority to investigate 
;iny questions concerning the forests and forest industries of 
tlie State and to advise and assist forest owners in carrying 
(Hit the most effective technical methods on their land. It 
should have authority and funds for growing planting stock 
and distributing it to local owners in the State at cost. It 
sliould have charge of the acquisition and administration of 
State fore.sts and of the classification of receded tax lands to 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



73 



segregate areas which should be incorporated in State forests. 
It should unify in one liody all fffrest activities of the State. 
The make-up of this commission should represent the general 
public, its forest owners, its wood-using industries, and other 
interests or organizations concerned with timber production. 

STATE AND MUNICIPAL FORESTS. 

Effective progress in restoring the enormous areas of ile- 
nuded land to timber growth can be made only by largely in- 
creasing public forests. Supplementing the policy of forest 
acquisition by the Federal Government, every State, including 
States in the prairie regions, should acquire forest lands or 
lands adapted to tree growth, and provide systematically for 
the planting of such areas as will not otherwise restock with 
timber of valuable species. In the forest regions State acquisi- 
tion should be concentrated largely upon cut-over lands not 
needed for other purposes. As a part of this program, pro- 
vision should be made for the classification of lands owned by 
the State or acquired through nonpayment of taxes or other- 
wise, and for the segregation as permanent State forests of 
areas best suited for growing timber or protecting watersheds. 

State laws should encourage the acquisition of forest lands 
by municipalities, to the end that public-forest ownership may 



be extended by any agencies capable of undertaking it. Public- 
forest ownersliip not only is the most effective direct attack 
upon timber depletion; it serves other vital publi'' interests, 
particularly recreation, the protection of water st>urces, and 
the conservation of wild life. 

Furthermore, publicly owned and administered forests, 
widely distributed and setting standards of technical prac- 
tice, will be of the greatest educational value and stimulus 
to the general adoption by private owners of methods which 
will keep their lands productive. 

TAXATION OF FOREST LANDS. 

The ad.nistment of existing methods of taxation to the grow- 
ing of timber crops is one of the most essential steps for ar- 
resting devastation. Every State containing forest areas should 
provide for an exhaustive study of the effects of existing 
methods and local practices of taxation upon forest devastation, 
to the end that needed revision of tax laws may be drafted 
and considered by its legislature. The nation-wide study of 
forest taxation proposed for the Federal Government would 
serve to assist and correlate the consideration of this problem 
in the respective States. 



ADDITIONAL COPIES 

OF THIS PUBLICATIO.M MAT BE PROCURED Ff 

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GOVERNMENT PRINTING OFFICE 

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